With the adjustment of business structure, the proportion of polysilicon income continues to rise. The polycrystalline conversion of silicon wafers to single crystals and the default of subsidies for photovoltaic power stations have seriously dragged down the company's development. Since 2018, the company has lost money for three consecutive years. The company started the strategic adjustment, gradually sold the power station, and refocused on the photovoltaic polysilicon business.
It is expected that the supply and demand of silicon will remain tight in 21 years, and the price will remain high. Due to the large lag of silicon material production expansion, the new capacity of silicon material can not fill the gap of downstream wafer capacity expansion. It is estimated that the demand for silicon in 21 years is about 560000 tons, and the effective production capacity is 570000 tons, which is in a tight supply situation as a whole. Although a number of enterprises have put into production capacity under construction in the past 22 years, most of the production capacity has reached production time around the fourth quarter, which does not make much contribution to next year's supply, and does not rule out the possibility that the progress of production will be delayed by double control. It is expected that the overall situation of 22 years is still tight.
The production consumption of silane process is greatly reduced and has the advantage of cost. At present, the power consumption for the production of 1 kg of granular silicon is only 18 kWh, which is significantly lower than that of Siemens method 60 kWh / kg; in terms of water and hydrogen consumption, the FBR method is 30% less than Siemens method. 42%. In terms of investment, granular silicon needs only 700 million initial investment per 10,000 tons of production capacity, which can be reduced by 150-200 million yuan compared with Siemens method, which has a cost advantage.
Master the mass production technology of granular silicon and enter the capacity scale of 10,000 tons. The company plans to produce 100000 tons of granular silicon in Xuzhou, 100000 tons in Leshan and 300000 tons in Baotou in the future. It is estimated that the company's granular silicon production capacity will reach 360,000 tons in 21-22, a substantial increase. The expansion of granular silicon production capacity helps the company to have the advantage of scale, the production cost is expected to be further reduced, and the profitability is expected to increase gradually.
Investment suggestion: the company's net return profit for 21-23 is expected to be 56.91-69.75-pound 7.409 billion, with a year-on-year growth rate of + 22.6% for 22 and 23, and a corresponding EPS of 0.23-0.28 for 21-23. Taking into account the comparable company valuation and the PE valuation level of the company's three years of history, the company is given a 22-year target valuation of 13 times PE, corresponding to a target price of HK $4.45, with a "buy" rating for the first time.
Risk hint: policy risk, high debt ratio related risk