A leader in photovoltaic modules, with steady growth in performance

The company was founded in 1986 and is a leader in the photovoltaic industry. In 2016, it first entered the top ten global module shipments, and ranked sixth in the world in 2021-2022.

HJT pioneer, technology is the engine of growth

Reviewing the development history of PERC batteries to replace BSF batteries, new technology products can get a premium over a period of time with advantages such as power generation gain, etc. At the same time, companies that take the lead in deploying new production capacity can achieve a rapid increase in market share. Among the new technologies, HJT technology with higher battery efficiency and output power is expected to become mainstream in the future. Currently, there are premiums of 10%-20% and 7%-13% compared to PERC and TopCon components.

The company's HJT is leading in progress and has been number one in shipping for 3 consecutive years

On the technical side, in terms of efficiency, the company's HJT conversion efficiency has broken world records many times; in terms of cost reduction, the company's non-main gate technology has many patented layouts, leading the industry in silicon wafer thickness by about 30 μm, and is equipped with silver coated copper technology; Hyper Link technology has been developed for HJT characteristics, and high-power HJT products have been launched.

In terms of production capacity layout, the company's production capacity for batteries and modules under construction and planning will reach 19 and 21 GW respectively. It is estimated that the production capacity of Foxi modules will reach 15 GW in 2023, leading the production capacity layout industry. In a new round of technological change, the company is expected to overtake cars at a curve with leading technology and production capacity layout.

Develop the energy storage business to create a second growth point

The company began to lay out the energy storage business in 2018, using Shuangyili as the business carrier. The company has complete product certification and has successfully entered overseas markets with high gross profit and high barriers. Export sales accounted for 70% in the first three quarters of 2022, and the first-mover advantage is remarkable. At the same time, we continue to increase our self-supply ratio and import BMS, PCS, etc., to strengthen our competitiveness.

The company signed an energy storage cooperation agreement with SMA, a leading US inverter, in 2023, which is expected to fully benefit from the high growth of the US energy storage market in the future. As of January 2023, Shuangyili has signed an order of about 1 GWh, and the order under discussion is about 3 GWh, for a total of about 4 GWh. There are enough orders on hand.

Profit forecasting

We expect the company to ship 21, 39, and 47 GW of battery modules in 23-25, and 4, 6, and 8 GW of energy storage in 23-25. Combined with other businesses such as photovoltaic power generation, lighting and auxiliary photovoltaic products, the company's revenue for 23-25 is estimated to be 32.8, 52.4, and 64.4 billion yuan, yoy +12%, 60%, and 23%, respectively; net profit to return to the mother is 18.25 billion yuan, yoy +91%, 40%, and 20%, respectively.

We compare photovoltaic integrated module companies and energy storage companies. Considering the company's leading battery technology and first-mover advantage in the US storage market, we gave the company 12-15X PE in 24 years, corresponding to a target price of 27-33 yuan/share, covering the “buy” rating for the first time.

Risk warning: Technology iteration falls short of expectations; import and export trade protection policy risks; PV installation falls short of expectations; estimates are subjective and are for reference only, etc.