Signed a purchase agreement for granular silicon frames with Longji Green Energy
The company is a leader in the granular silicon route in the industry. According to the company announcement, the company's subsidiary Jiangsu Zhongneng signed a granular silicon frame procurement agreement with Longji Green Energy, and the granular silicon market share is expected to increase rapidly. Considering the oversupply of silicon, the price of silicon material has dropped sharply in 23, and the price of silicon is expected to remain low in 24-26. We lower the company's silicon price and shipping assumptions in 24-25. We expect the company's 24/25/26 EPS to be 0.09/0.12/0.13 yuan (previous value: 0.2/0.23/- yuan). Referring to Wind's unanimous expectations, it is comparable to the company's 9.97 times PE in 24 years. Considering the continuous release of the company's granular silicon production capacity, the quality of silicon material has also improved, and the company has a cost control advantage. The company was given 14 times PE over 24 years, corresponding to a target price of HK$1.36 (previous value: HK$3.00, converted to HK$1 = HK$1.08), maintaining a “buy” rating.
Long-term procurement contracts have been signed with major downstream customers. According to the company's announcement, Jiangsu Zhongneng, a subsidiary of GCL Technology, signed a long-term procurement contract with Longji Green Energy for granular silicon. According to the procurement contract, Longji Green Energy will purchase 425,000 tons of granular silicon from the company by the end of '26, of which 125,000 tons will be purchased in 24 years, 150,000 tons in '25, and 150,000 tons in '26. We believe that as one of the world's leading silicon wafer companies, the signing of a large granular silicon purchase order marks a marked increase in downstream customers' approval of granular silicon, and we are optimistic that the market share of granular silicon is expected to increase rapidly.
The company has strong cost control over granular silicon, and the quality has improved markedly
The company is a leader in the granular silicon route in the industry and has a significant advantage in terms of cost. According to the company's 23-year performance report, the production cost of granular silicon at the company's Leshan base has been reduced to about 35 yuan/kg, and the cost has a clear lead over the Siemens method. In terms of scale, the company's manual production capacity has reached 420,000 tons, and its production capacity is at the forefront of the industry. In terms of quality, according to the company's 23-year performance report, the turbidity of the company's granular silicon has been fully controlled within 120 NTU, and small-batch output of less than 30 NTU will be achieved, which will effectively improve the customer's yield level, and the quality has improved markedly.
Another breakthrough in large-scale components of perovskite, and the industrialization process accelerated
GCL Optoelectronics, a subsidiary of the company, has made frequent breakthroughs in perovskite components, and industrialization can be expected. In terms of single-junction modules, according to GCL Optoelectronics's announcement, the conversion efficiency of the company's single-junction 1m*2m large-size perovskite modules has exceeded 19.04%, entering the fast track of industrialization; in terms of laminated modules, the efficiency of GCL Optoelectronics's 279mm*370mm laminated modules reached 26.17%, a record high. In terms of production capacity, GCL Optoelectronics plans to build a 2GW grade perovskite production line in Kunshan, establishing the company's pioneering position in the perovskite commercialization process.
Risk warning: silicon prices fluctuated beyond expectations; downstream demand fell short of expectations, etc.