Jianghe Group: An integrated service provider company for the curtain wall industry was founded in 1999. Liu Zaiwang, the founder, is the number one brand in the global high-end curtain wall industry. It was listed on the Shanghai Stock Exchange in 2011.

The company's main business is divided into two major segments: building decoration business and healthcare business. The building decoration sector includes curtain wall and photovoltaic construction, interior decoration and design business. In the healthcare sector, the company positions itself as an international professional ophthalmology medical service provider, with ophthalmology as its main direction. The company adheres to the main business development strategy and owns well-known brands in the industry such as JANGHO Jianghe Curtain Wall, Sundart Chengda Group (HK.1568), Gangyuan Decoration, Gangyuan Curtain Wall, SLD Liang Zhitian Design Group (HK.2262), Vision, and Jiang He Zeming. In 2023, the company achieved operating income of 20.954 billion yuan, an increase of 16.05% year on year; realized net profit of 0.672 billion yuan, an increase of 36.89% year on year.

The growth rate of curtain wall revenue and orders is obvious, and the PV curtain wall transformation has achieved remarkable results. In 2023, the company's building decoration business added orders of about 25.84 billion yuan, an increase of 10% over the previous year. Among them, the curtain wall and photovoltaic construction business added orders of about 17.18 billion yuan, an increase of 21% over the previous year.

In 2023, the company undertook a total of 1.37 billion yuan in photovoltaic construction projects (BIPV), an increase of 60.42% over the previous year. The company's photovoltaic construction project achieved revenue of 0.704 billion yuan, an increase of 309.30% over the previous year.

The company invested in the construction of a flexible production base project for special-shaped photovoltaic modules integrated into photovoltaic buildings, which will be put into operation in 2023. Through collaboration between special-shaped photovoltaic module production and existing curtain wall engineering business, while meeting the needs of the company's own photovoltaic construction projects, foreign sales of special-shaped photovoltaic module products for BIPV projects are increased, creating a new profit growth point for the company from the product route.

BIPV: Benefiting from the policy side, the long-term decline in module prices and the rapid release of demand. The company has fully benefited from the photovoltaic curtain wall, which has both power generation, decoration and building material functions. Currently, it is continuously promoted by the policy side. At the same time, under the general trend of module prices continuing to decline, demand is expected to be fully released.

Policy side: 1) Standard construction: Propose standards and atlases related to integrated building photovoltaic construction, and support some mandatory policies. For example, in October 2021, the full mandatory standard “General Specification for Building Energy Conservation and Renewable Energy Utilization” was issued, requiring that new buildings should be equipped with solar energy systems from April 1, 2022; the National Energy Administration cooperated with the National Standard Commission to issue the “Technical Standards for the Application of Building Photovoltaic Systems”, which proposed requirements for photovoltaic power generation design, construction, acceptance, operation and maintenance. 2) Financial subsidies:

The country and many provinces, cities, and regions have introduced local subsidy policies for the integration of photovoltaic buildings. The policy covers star green buildings, near-zero energy consumption buildings, and integrated photovoltaic construction projects, with fixed subsidies according to the construction area, installed capacity, or actual power generation capacity.

Market side: As technology continues to advance, module costs have continued to decline over a long period of time, photovoltaic+ construction application scenarios represented by BIPV gradually have commercial value, and the era of market price exchange for volume is gradually coming. By the end of 2023, the price of photovoltaic modules had dropped to less than 1 yuan/W, with a drop of about 48% during the year, which greatly stimulated the release of terminal demand. Under the dual benefits of declining investment costs and policy subsidies, the scale of the industry is expected to achieve a breakthrough in volume. Currently, the main application market for photovoltaic facades is the new construction market. The penetration rate of existing building curtain wall renovation is not high. It is estimated that by 2025, the total PV curtain wall market space is expected to reach 0.039 billion square meters, with a corresponding installed capacity of 5.85 GW, and the corresponding amount is 62.502 billion yuan. According to a further forecast, if the photovoltaic curtain wall penetration rate (new construction market) reaches 50%, the corresponding market space size will be 486.257 billion yuan. The company continues to develop its photovoltaic curtain wall business. It recorded rapid growth in BIPV revenue and orders in 2023, and the production capacity investment of special-shaped modules is expected to further strengthen its competitive advantage, large market influence and market share. The company is expected to achieve net profit of 0.76 and 0.88 billion yuan in 2024 and 2025, corresponding to the current closing price of PE 7.5 and 6.5 times, respectively, with a “buy” rating.

Risk warning

1. New BIPV orders fall short of expectations; 2. Ongoing orders fall short of expectations; 3. Price fluctuations of raw materials fall short of expectations; 4. Carbon reduction policies fall short of expectations; 5. Risk that profit forecasting assumptions are untrue or fall short of expectations.