Incident: Maxeon Solar Technologies, Ltd., a listed company in which the company participated, filed a patent infringement lawsuit against Aiko Energy Germany GmbH, Solarlab Aiko Europe GmbH, and its distributor Memodo GmbH in Mannheim, Germany. The dispute mainly revolves around the Maxeon patent number No. EP2297788B1 (BC battery) and Aixu ABC battery patent technology.
Competition in the industry is intensifying, and technological innovation is becoming more and more important. In recent years, the industry's production capacity has expanded dramatically. Under the trend of oversupply, the competitiveness of homogenized production capacity has weakened, and the overall profitability of the industry has declined. It is expected that cost reduction and efficiency brought about by subsequent technological innovation will become the key to competitive advantage.
The company's technological innovation leads the industry. As of the end of 2023H1, the company has a total of 1,559 effectively authorized intellectual property rights. In terms of silicon wafers, the company's chip labor production efficiency and chip output are leading; in terms of components, the company is one of the first companies in China to carry out quantitative production of PERC, making progress in boron doping, tunneling through oxide layers, and copper processes.
The economic efficiency of the XBC route has improved, and the company is positioned ahead of schedule, which is expected to gain a first-mover advantage. By placing a metal electrode on the back of the battery, the XBC achieves unobstructed front light, and at the same time facilitates passivation on the entire surface, and has great potential for conversion efficiency. With the advancement of technologies such as laser graphics and metallization to reduce costs, XBC has broad prospects as a platform technology, and is expected to be integrated with TopCon and HJT in the future.
The company laid out XBC Technology ahead of schedule and began participating in Maxeon, a leading global IBC company, in 2019. Currently, it holds 23.7% of the shares as the largest shareholder. Maxeon currently has more than 1,600 patents and more than 360 patents under review in more than 30 countries. The subsequent introduction of 210 processes is expected to further reduce costs and increase efficiency. In addition to technical improvements and expansion of plants in Malaysia and Mexico, its 3.5 GW battery and module project in the US is already planned. Based on Maxeon's IBC technology, intellectual property rights of tile components, and technological innovation advantages, Zhonghuan is expected to further enhance its technological advantages and level of internationalization through collaborative development with it in terms of technology, production and channels.
Investment suggestion: As a silicon wafer leader, the company has obvious advantages in technology and supply chain under the N-type iteration, while production capacity is gradually being increased.
The company is expected to achieve operating income of 631/863/992 billion yuan in 2023-2025, -5.82%/+36.80%/+14.86% year on year. The company's net profit from 2023-2025 is 75/83/101 billion yuan, +10.48%/+10.37%/+21.64%, corresponding to the current P/E of 10.01x/9.07x/7.46x, maintaining the “buy” rating.
Risk warning: (1) risk of global macroeconomic fluctuations; (2) risk of competition within the industry; (3) supply chain insurance risk; (4) risk of upstream and downstream price fluctuations.