\u3000\u3000 Tianjin Zhonghuan Semiconductor Co.Ltd(002129) (002129)
Key investment points
The silicon chip leader has accumulated a lot, and G12 helps the photovoltaic business take off
The company is the double leader of photovoltaic silicon wafer and semiconductor silicon wafer, and has cultivated monocrystalline silicon materials for more than 60 years. From 2016 to 2020, the company’s four-year revenue CAGR was 29.46%, and the net profit attributable to the parent company CAGR was 28.29%. In the first three quarters of 2021, the company achieved an operating revenue of 29.089 billion yuan, a year-on-year increase of 117.46%; The net profit attributable to the parent company was 2.762 billion yuan, a year-on-year increase of 226.29%.
The duopoly pattern of silicon wafer links is stable, and large-scale promotes cost reduction and efficiency increase
The large-scale silicon wafer promotes cost reduction and efficiency increase. Compared with M2 silicon wafer, the cost of G12 in the production superposition system is expected to decrease by 29.41 points / W, greatly raising the barriers to competition. It is expected that the proportion of 182 + 210 large-size silicon wafer is expected to exceed 85% in 2023 and 95% in 2025. The duopoly pattern of silicon wafer link is stable, and CR2 exceeds 50%. With the release of new production capacity and the rapid iteration of single crystal products and large-size products, it is expected that the market concentration will be further improved. The industrialization of n-type high-efficiency batteries is accelerated. The production capacity of n-type batteries is expected to exceed 60GW in 2022, and n-type high-power products usher in a growth period.
G12 promotes the increase of market share in large quantities, and takes the lead in technology and cost
Since 2017, the company’s sales volume of monocrystalline silicon wafer has ranked first in the world. At present, 210 production capacity has accelerated. It is expected that the company’s crystal production capacity will reach 135gw by 2023, including 116gw of 210 products. The company actively promotes the construction of G12 wafer production capacity to support the crystal production capacity. The planned production capacity of G12 wafer has exceeded 105gw. The company takes the lead in large-scale + flake + n-type silicon wafer, p-type 160 μ M gradually becomes the mainstream size, and the market share of n-type silicon wafer ranks first in the world.
Positioning differentiated high-efficiency component manufacturing, superposition of “G12 + laminated tile” double technical advantages
The company acquired maxeon, improved the global layout, and created an industry-leading “G12 + efficient tile stacking” dual technology platform to maintain continuous performance leadership with differentiated products. By the end of 2021, the production capacity of the company’s laminated components will reach 14gw, with G12 accounting for more than 85%. The production capacity of laminated components is expected to exceed 20GW in 2022.
Profit forecast and valuation
The company is a double leader in photovoltaic and semiconductor silicon wafers. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be 3.850 billion yuan, 6.00 billion yuan and 8 billion yuan respectively, and the corresponding EPS will be 1.19, 1.86 and 2.48 yuan / share respectively. According to the segment valuation method, for the photovoltaic sector, we give the company 36 times of the industry average Pe2 in 2022. It is expected that the photovoltaic business will realize a net profit attributable to the parent company of 5.655 billion yuan in 2022, corresponding to a market value of 205.1 billion yuan; In the semiconductor sector, we give the company 16 times the industry average PS2 in 2022. It is estimated that the semiconductor material business will achieve an operating revenue of 3.648 billion yuan in 2022, corresponding to a market value of 58.4 billion yuan. To sum up, the target market value of the company in 2022 is 263.5 billion yuan. When there is still 92% room for the current share price to rise, the company will be rated as “buy”.
Risk tips
(1) the global PV installation demand is lower than expected; (2) The industrialization progress of 210 photovoltaic silicon wafer is less than expected; (3) The customer expansion of 12 inch semiconductor silicon wafer was less than expected.
