Company trends
The current situation of the company
According to the company's website, on June 16, Xuzhou base successfully put into production 30,000 tons of FBR granular silicon, and we believe that the speed of putting into production exceeds market expectations.
Comment
The production capacity of granular silicon continues to fall to the ground, and various indicators continue to be optimized to support the company's long-term steady growth. The production capacity of 30,000 tons of FBR granular silicon in Xuzhou base has been successfully put into production, and the speed of construction and production has exceeded market expectations. At the same time, the company expects 100000 tons of Leshan base to be put into production in July this year and reach production by the end of this year; 100000 tons of Baotou base is conservatively expected to be put into production in October and full production of 1H23. To sum up, we estimate that the company's effective production capacity of granular silicon will reach 260000 tons by the end of 2022, and the effective output for the whole year is about 70,000 tons as planned. According to the company, Xuzhou has put into production 30,000 tons of granular silicon comprehensive power consumption 14.8kWh/kg, comprehensive steam unit consumption 15.3kg/kg, while the company granular silicon single-pass conversion rate of 99% 90% can be used in single crystals, and the current N-type materials have passed small batch verification, and the feedback is good. We believe that the smooth landing of the company's production capacity, the continuous optimization of the overlay index, the company's long-term growth is expected.
With the high demand for photovoltaic equipment at home and abroad, we are optimistic that silicon will continue to benefit as one of the tightest sub-links of supply and demand, and that the high price of silicon will bring opportunities for the development of the company's new granular silicon technology:
Domestically, according to the data of the Energy Bureau, the newly installed photovoltaic 6.83GW in May is + 141% compared with the same period last year, and the month-on-month ratio is + 86%. From January to May, the cumulative installed photovoltaic 23.71GW, year on year + 129%, we think that distributed due to low cost, high rate of return, demand resilience; ground power plant incremental projects this year orderly progress, overall, we are optimistic that domestic demand will increase 55% to 85GW in 2022.
Overseas, according to the cumulative export of 24.4GW modules to Europe by + 144% from January to April of PVInfoLink,2022, we expect 2022 photovoltaic installations in Europe to increase by 60-100% to 40-50GW with the sharp increase in electricity prices and the stimulation of RepowerEU policy. The US government plans to exempt the import of Southeast Asian components from additional tariffs in the next 24 months. 2, we expect component companies to repair US shipments one after another. We are optimistic that overseas demand for 140-150GW in 2022 will increase by 30-40 per cent.
Profit forecast and valuation
Considering the continuation of high silicon prices, we increase the net profit of 2022Universe 2023 by 21% scarp 52% to 129.5 gambit 10.97 billion (based on the 2022apt 2023 average silicon price of 220,130 / kg / kg). The current share price corresponds to the price / earnings ratio of 5.7pm / kg of 2022max in 2023, maintaining the industry rating of outperforming. Considering the market catalysis climbing and cost verification in the third quarter, we currently maintain the target price of HK $4.00 and upside space of 27%. The target price corresponds to a price-to-earnings ratio of 7.2cm in 2023 to 8.5 times earnings.
Risk.
The demand of photovoltaic terminal is lower than expected, and the supply bottleneck of other photovoltaic raw and auxiliary materials is higher than expected.