According to SMM PV Vision, as of May 21, N-type granular silicon was priced at 39 yuan/kg, N-type rod-shaped silicon was priced at 42.5 yuan/kg, and the price difference between granular silicon and rod-shaped silicon was reduced to 3.5 yuan/kg.
The production capacity of granular silicon was greatly increased. In 2023, the company's nominal polysilicon production capacity reached 420,000 tons, and the effective production capacity reached 340,000 tons, an increase of 200,000 tons over the beginning of '22. The company has an annual production capacity of 12GW of monocrystalline crystals and 58.5 GW of silicon wafers per year. The company shipped 2261,000 tons of polysilicon (including 18,500 tons of internal sales) and sold 51.89 MW of silicon wafers (including sales of 23.22 MW of foundry wafers), an increase of 141% and 12% over 93,900 tons of polysilicon and 46.31 MW silicon wafers in the same period in 2022.
24Q1 granular silicon is full of production and sales. In Q1 2024, the company produced about 65,500 tons of granular silicon, shipped about 65,200 tons (including internal sales of about 0.33 million tons), and the average external sales price (tax included) was approximately RMB 55 per kilogram. During March 2024, the turbidity level of the Group's granular silicon was basically reduced to less than 120 NTU. More importantly, the proportion of products with a turbidity level of granular silicon below 100 NTU was as high as 75%, which will be further reduced in the future.
24Q1 performance is under pressure, and low costs are expected to help the company get through the cycle. The company released its results for the first quarter of 2024. During the reporting period, the profit attributable to the company's unaudited owners was approximately RMB 0.3 billion, and the unaudited revenue was approximately RMB 5.470 billion. The pressure on the company's Q1 performance was mainly affected by falling prices of silicon materials and silicon wafers, followed by the decline in the company's silicon production capacity and R&D expenses. The average production cost of 23Q4 granular silicon at the company's Xinyuan base has been as low as RMB 35.9 per kilogram. Looking ahead, as the commissioning of the Xinhuan base climbs, it is expected that the company's costs will continue to decline, and the low cost is expected to help the company get through the cycle.
Investment advice: We expect the company's net profit to be 25.55/33.44/4.175 billion yuan in 24-26, or +1.8%/+30.8%/+24.9% year-on-year, corresponding EPS of 0.09/0.12/0.16 yuan, respectively, to maintain a “buy” rating.
Risk warning: PV installed demand falls short of expectations, and silicon prices have declined beyond expectations