Brief performance review

On August 30, 2024, the company released its semi-annual report. In the first half of 2024, it achieved operating income of 38.5 billion yuan, a year-on-year decrease of 40%, and a net loss of 5.2 billion yuan to mother. Among them, Q2 achieved revenue of 20.9 billion yuan, a year-on-year decrease of 43%, and a net loss of 2.9 billion yuan to mother.

Management analysis

Affected by increased demand and competition, the shipping growth rate has slowed: due to deep price adjustments in the industrial chain and the decline in global demand growth, the company's shipping pace has slowed. In the first half of the year, silicon wafers/modules were shipped at 44.44/31.34GW, respectively. Among them, sales in the Asia-Pacific region increased sharply by more than 140% year on year.

Affected by price reductions in the industrial chain, a large amount of inventory impairment was calculated: in the first half of the year, the company calculated impairment reserves totaling 5.78 billion yuan, of which the inventory depreciation was 4.87 billion yuan, mainly due to price drop losses caused by the rapid decline in industrial chain prices in the second quarter; fixed assets depreciated 0.85 billion yuan. We determined that it was mainly old PERC production capacity without transformation conditions.

Cash on hand is abundant and finances are stable: the company's net cash flow from operating activities in the first half of the year was -6.4 billion yuan, of which -1.5 billion yuan was Q2. As of the end of the reporting period, the company had cash capital of 54.5 billion yuan, a balance ratio of 59%, and a reasonable balance and liability structure. The company has good cash flow management and capital turnover, and continues to maintain an excellent level of financial health during the downturn in the industry.

BC shipments reached 10 GW in the first half of the year, and HPBC 2.0 made breakthrough progress: the company shipped about 10 GW of BC modules in the first half of the year, and excellent power generation performance and low attenuation performance were proven by numerous market experiments.

Furthermore, the company achieved a landmark breakthrough in HPBC 2.0 mass production technology. The entire battery mass production line was completed, and the mass production efficiency reached 26.6%. The mass production power of Hi-MO 9 modules based on HPBC 2.0 battery technology reached 660W, and the conversion efficiency jumped sharply to 24.43%.

Frontier technology research and development continues to lead the industry, and perovskite laminated batteries set a new world record for efficiency:

In terms of forward-looking research and development of next-generation technology, the company's silicon-perovskite laminated battery conversion efficiency exceeded 34.6%, continuously setting the world record for silicon-perovskite laminated batteries; the authoritative certification efficiency of commercial M6 size silicon-perovskite laminated batteries reached 30.1%, making breakthrough progress in commercial application.

Profit Forecasts, Valuations, and Ratings

Based on the semi-annual report and our latest judgment on the industry, the company's 2024-2026 net profit was adjusted to -2.3, 4.9, and 6.7 billion yuan to maintain the “buy” rating.

Risk warning

Product price performance fell short of expectations; raw material prices rose beyond expectations; the international trade environment deteriorated; and there was a risk that the competitive landscape would deteriorate.