Event
Beijing Express publishes 2020 Annual report
According to the annual report released by Beijing Express in 2020, the company achieved an operating income of 4.056 billion yuan in 2020, an increase of 97.15% over the same period last year, and a net profit of 440 million yuan, an increase of 67.09% over the same period last year, corresponding to an EPS of 0.22 yuan. At the same time, the company's weighted return on equity for the whole of last year was 5.98%, up 2.26 percentage points from a year earlier.
Brief comment
New materials and high-end equipment business growth, new energy power generation is relatively stable in 2020, the company's revenue increased by 97.15% year-on-year, the increase is mainly from new materials and high-end equipment business. Among them, the revenue of the new materials business reached 1.815 billion yuan in 2020, an increase of 216.01% over the same period last year, mainly because the company's Wuhai New Materials Industrial Park project was put into production in the first half of 2020, and its production capacity gradually climbed in the second half of the year, making the company's annual wafer output reach 1.016 billion wafers, an increase of 136% over the same period last year. In the high-end equipment business, as some of the orders signed by the company in 2019 were delivered this year and confirmed revenue, the business revenue increased by 1860% year-on-year to 612 million yuan. In the new energy power generation business, the newly installed part of the company in 2020 is mainly due to the increment brought by the grid connection of the existing power stations under construction, so the revenue of this business is basically the same as the same period last year.
According to the information disclosed in the annual report, the company has put into production wafer capacity in 7GW/ year, and the production capacity under construction mainly includes "Leshan Phase I 12GW pull Rod cutting Project" and "Wuhai 10GW High efficiency single Crystal Silicon Rod Project". We expect that the two projects will be put into production in the second half of the year, when the company's overall wafer production capacity will usher in a substantial increase. Recently, the shortage of silicon material in the upstream leads to the shortage of silicon wafer supply, which leads to the rising trend of silicon material and wafer price in the photovoltaic industry chain. Considering that it takes a long time for the upstream production capacity to be put into production, we judge that the upstream silicon material and wafer links will remain high at least this year, with the gradual expansion of the company's capacity under construction, its wafer business will also usher in a situation of simultaneous increase in volume and price.
Equipment end technology is mature, the company is expected to continue to benefit from the trend of large size in 2020, the company successfully developed JD-1600 fully automatic soft shaft single crystal furnace, and has achieved mass production. The furnace has a high degree of full automation, strong adaptability, low degree of manual dependence, good expansibility of centralized monitoring, and has reserved CCZ hardware and software interfaces. The company's independent research and development of JD-1600 furnace and diamond wire slicer can produce 12-inch silicon rods, 210mm wafers and other products, has passed customer certification and batch supply. In the future, the expansion of the company's new material business will all use self-produced single crystal silicon furnaces. Under the trend of gradually large size in the silicon wafer industry, the company's core advantages in technology are expected to be highlighted.
Maintain the company's "buy" rating
The company is currently building a large scale of silicon wafer production capacity, and the company will become the second echelon leader of the domestic wafer industry after it is gradually put into production in the future. Considering that the silicon material and wafer links in the upper reaches of the photovoltaic industry chain will continue to be in a high boom this year, we judge that the company's silicon wafer business will usher in a situation of rising volume and price this year. We estimate that from 2020 to 2022, the company will achieve operating income of 8.66 billion yuan, 16.448 billion yuan and 19.879 billion yuan respectively, and return to its mother net profit of 10.6,17.4 and 2.07 billion yuan respectively, and the corresponding PE will be 20.05,12.22,10.31 times respectively, maintaining the company's buy rating.
Risk hints: the production progress of silicon wafer capacity is not as expected; the risk of price decline caused by intensified competition in silicon wafers; and the lower-than-expected utilization of photovoltaic and wind power.