According to Aotewei's WeChat account, recently, the company has continuously received confirmation of the transformation of batch 0BB string welders from two leading photovoltaic companies. It is mainly used in the TopCon technology route. The total production capacity of the transformation is about 20 GW, covering various welding processes, which can meet the different production needs of the module side. 0BB transformation is one of the important technological changes currently in the photovoltaic module industry, and the revenue recognition speed and profitability of transformation services is expected to surpass the traditional equipment business. We are optimistic about the order and profit resilience that the 0BB transformation will bring to the company in the context of pressure to expand PV production, and maintain a “buy” rating.

Metallization cost reduction drives frequent iterations in component technology. 0BB transformation is currently one of the important iterative technologies

Battery interconnection technology (string welding) is an important part of photovoltaic cells to reduce metallization costs such as silver paste. In recent years, battery gate technology has evolved from 4BB, 5BB, and MBB to SMBB, and the silver paste consumption of grid wires has been continuously decreasing. 0BB (no main grid) is one of the important trends in the current iteration of string welding technology. By changing the string welding process and method, the welding belt can replace the silver paste main grid, and complete current serial connection and transportation while achieving battery interconnection, further saving silver paste costs.

Altway 0BB has deep technical reserves, and the total production capacity of the company's subsequent transformation, which is still being confirmed, has exceeded 60 GW

After three years of continuous exploration and verification, the company has reserved more than 120 patents related to 0BB technology. Currently, the company's equipment is suitable for various technical routes such as TopCon, HJT, and BC; it can meet various process routes such as 1) printing glue and then curing, 2) welding and then glue curing, 3) UV glue or other glue processes with different systems. According to the company's WeChat account, the company has now shipped a total of 6,000 high-speed and ultra-high-speed string welding machines, and there is plenty of room for 0BB to be modified or replaced in the future. At present, the company is still in the process of confirming that the total production capacity of the subsequent renovation project has exceeded 60 GW, and the 0BB transformation is expected to be fully industrialized in 2025.

Profit forecasting and valuation

In addition to the 0BB transformation, the company is profoundly benefiting from the equipment export demand brought about by the construction of overseas photovoltaic production capacity, as well as the expansion of the company's future development space by platformization in various fields such as semiconductors and lithium batteries. With the development of various technologies such as TopCon, XBC, and HJT, the company is expected to usher in technological iteration logic in various photovoltaic devices such as string welding, batteries, silicon wafers, etc. We maintain the company's net profit forecast. We expect net profit to be 1.628/1.726/1.844 billion yuan in 2024-2026, which is comparable to the company's 25-year wind consensus PE of 12 times, giving the company 12 times PE in 25 years, corresponding to a target price of 65.76 yuan (previous value of 65.88 yuan, 12X PE in '25. The target price drop was mainly due to debt-for-equity swaps and equity incentives, and an increase in total share capital), maintaining a “buy” rating.

Risk warning: The company's new product development falls short of expectations, industry competition intensifies, and iterative stringing technology expectations are low.