Main points of investment

The company's 2023Q3 realized revenue of 6.659 billion yuan, year-on-year + 49.68%, month-on-month ratio-0.09%, net profit of 785 million yuan, year-on-year + 64.61%, month-on-month ratio + 575.21%. The scale of silicon wafer shipments increased in the third quarter, the operating rate of the production line rebounded, and the company's profitability was significantly repaired. Q3 gross profit margin and net profit margin were 20.44% and 12.31% respectively, up 7.43% and 10.06pcts from the previous quarter.

Q3 silicon wafer shipments ushered in a significant growth, continued to promote the construction of new capacity. We expect the company's Q3 wafer production line to maintain a high production rate, with wafer shipments around 10GW in a single quarter, with a significant increase compared with Q2 and a rapid increase in market share. In terms of production capacity, the company's Baotou 40GW single crystal silicon project has achieved full production, on this basis, the company plans to build the third phase of 50GW crystal pulling capacity, after completion, the wafer production capacity will reach 90GW, strengthening the market position. In addition, the company has signed a long order to lock the imported sand of Unimin and TQC for the inner material of quartz crucible, and commissioned a related company to manufacture quartz crucible with new materials to ensure the crystal drawing demand of listed companies and the security of supply chain.

Actively promote the research and development of electrolytic cell products and accelerate the layout of hydrogen energy field. In the field of green electric hydrogen production, the company's main products are green electric intelligent hydrogen production system, which integrates alkaline electrolytic cell, gas-liquid separation system and purification system, etc., and adopts self-developed diaphragm and catalyst and is equipped with Yunbian integrated intelligent control system, the latest 2000Nm2/h alkaline electrolytic cell has been successfully offline, the maximum hydrogen production 2000Nm2/h, current density ≥ 6000A/m2. Since the beginning of this year, the domestic electrolytic cell bidding volume, the market is expected to usher in rapid growth in 24 years, the company's electrolytic cell capacity has been gradually put into production, 24 years is expected to contribute to the performance growth point.

Profit forecast

We estimate that the company's net return profit from 2023 to 2025 is respectively.

20.33LX 29.35Compact is RMB 3.517 billion, corresponding to the PE valuation of 8.76x/6.07x/5.06x, maintaining the "overweight" rating.

Risk Tips:

The demand for photovoltaic installation is lower than expected; the competition pattern of silicon wafers is intensified; and the guarantee capacity of the supply chain is not as expected.