Give it a “prudent increase in holdings” rating. EPS is expected to be -0.24, 0.04, and 0.08 yuan respectively in 2020-2022, giving 25 times the PE of 2022, corresponding to the target price of HK$2.38. Give a careful increase in holdings rating.
Affordable prices drive rapid growth in PV installations, and supply and demand for polysilicon continue to be tight. The economy of photovoltaics promotes the development of green energy, and carbon neutrality has become a global consensus. In the domestic market, “carbon peaks” have strengthened energy development goals. Affordable projects are growing rapidly, and the household market is developing rapidly; overseas markets, traditional markets such as Europe and the US are growing strongly, and the growth in emerging markets is obvious. Although the epidemic has caused short-term disturbances in the development of photovoltaics, demand is optimistic in the medium to long term, and the prospects for the industry are broad. Currently, supply and demand in the polysilicon market continues to be tight, downstream installed demand is optimistic, the industrial chain is actively expanding production, demand for high-quality silicon materials is rising, and the release of new silicon production capacity is slow. It is expected that phased supply constraints will continue, and prices are expected to remain high.
The industrialization of granular silicon is advancing rapidly, and the company has mastered core technology and is expected to benefit deeply. FBR granulated silicon is produced using the silane flow bed method. Compared with the mainstream Siemens method in the industry, it has advantages such as high quality and low cost, and is suitable for continuous straight-drawn monocrystalline processes, and is expected to become the next generation silicon production process. The company is the only enterprise in the world that has mastered large-scale production of FBR granulated silicon. Low-cost, high-tech barriers build core competitiveness. Downstream customer verification of the company's granular silicon products progressed smoothly, technical issues such as product purity control and “splashed silicon” improved markedly, and industrialization progressed rapidly. The company actively adjusted its strategic transformation, focused on the main silicon business, and developed the granular silicon business. At present, the company's granular silicon production capacity has reached 10,000 tons, ranking first in the world, and future production capacity plans continue to expand. The company is expected to use its granular silicon advantage business to start a new round of rapid growth and achieve a steady recovery in performance.
catalysts. The signing of long supply chain orders and downstream granular silicon verification are progressing smoothly.
Risk warning. The overseas epidemic affects the risk of photovoltaic installations and the impact of unexpected technical failures.