Key points of investment
It is proposed to invest 400 million yuan to build the Suzhou Intelligent Manufacturing East China base to help the company's business take off.1) According to the company's announcement, the company plans to invest a total of 400 million yuan to build the Jinchen Intelligent Manufacturing East China base. Construction address: Suzhou Taihu Science and Technology Industrial Park. The first phase of the project (covering an area of about 15.06 acres) is scheduled to be fully started and completed within 2 years after obtaining a construction permit. The second phase of the project covers an area of 25.65 acres.
2) Construction purpose: It mainly focuses on the production and development of photovoltaic equipment and components, automated production line equipment, industrial robots and accessories, mechanical equipment and accessories. The company's production capacity layout will be further improved to meet business development and market needs.
3) The company's focus has completely shifted to Suzhou: the company moved its office address to Suzhou in 2020 (previously in Yingkou). According to the company's 2021 annual report, the number of employees in the company's main subsidiaries (mainly in Suzhou) has reached 1,155, accounting for 83% of the company's total number. In the future, as the company's intelligent manufacturing base in East China is gradually put into operation in Suzhou, taking advantage of the supporting advantages of the industrial chain in the Jiangsu and Zhejiang regions will help the company accelerate its take-off in the field of photovoltaic cells/module equipment.
Photovoltaic HJT equipment: The first microcrystalline PECVD settled in Jinneng; target efficiency was 25% +; HJT laboratory was built 1) In March 2022, the company's first microcrystalline HJT PECVD equipment arrived at Jinneng Technology, and it is planned to establish an HJT/TopCon laboratory, which will push the HJT battery mass production conversion efficiency to 25% +. Previously, the company's amorphous HJT PECVD equipment had been verified by Jinneng's production line. The average efficiency of 166-size cells produced reached 24.38%, and the average efficiency of the optimal batch reached 24.55%.
2) Technical strength: The company established a joint venture with Germany's H2GEMINI (core members have worked for Applied Materials, Mayerberg, Schmid, etc.) to establish Jin Chen twins. The technical strength+equity mechanism is leading the industry. PECVD equipment has the advantages of large production capacity and low cost.
3) HJT equipment order market space: HJT equipment order market space is expected to exceed 40 billion yuan in 2025, and CAGR in 2020-2025 is 80%. If the net interest rate is kept at 20% (net profit of 8 billion dollars) and 25 times PE is given, it is estimated that the HJT equipment industry has a reasonable total market value of 200 billion yuan. We judge that the company has a leading layout in the HJT equipment industry, and if it progresses smoothly, it will fully benefit.
TopCon equipment: Helping Ningbo of the Chinese Academy of Sciences achieve 25.53% efficiency; PECVD was introduced by a total of 3 customers. Since 2019, the company collaborated with the team from the Ningbo Institute of Materials of the Chinese Academy of Sciences to develop mass-produced tubular PECVD equipment and helped Ningbo of the Chinese Academy of Sciences achieve an efficiency record of 25.53%. At present, the company TopCon's tubular PECVD has been imported to a total of 3 customers:
Jingke, Jingao, Dongfang Risheng. The company mass-produces n-type TopCon batteries with an average efficiency of > 24% (maximum efficiency 24.5%).
At the same time, breakthroughs have also been made in the development of 2-in-1 equipment. It is a very small number of core equipment produced by photovoltaics that has completely independent intellectual property rights, developed ahead of overseas equipment vendors in China, and has received great attention from the industry.
Profit forecasting
The company's net profit for 2022-2024 is estimated to be 144/2/280 million yuan, an increase of 124%/48%/40% over the previous year, and the corresponding PE is 85/58/41 times. Considering the scarcity of the company's photovoltaic heterojunction equipment, maintain the “buy” rating.
Risk warning: HJT batteries are advancing at a pace that falls short of expectations; downstream production expansion falls short of expectations.