\u3000\u3000 Qingdao Gaoce Technology Co.Ltd(688556) (688556)
Key investment points
Recommendation logic: 1) the photovoltaic silicon wafer sector will accelerate the expansion of production. In 2022, 157gw of silicon wafer production capacity will be added. Coupled with the replacement of some existing equipment, the market space of silicon wafer cutting equipment is expected to be about 6.55 billion yuan. 2) The trend of large-size slicing is clear. Diamond wire and cutting equipment are developing towards thin line and high speed. Cutting equipment, consumables and technology usher in a new round of upgrading. We predict that by 2025, the market space of diamond wire is expected to reach 5.5 billion yuan, and the CAGR will reach 19% from 2022 to 2025. 3) The company has accumulated profound experience in the field of silicon wafer cutting. In 2021, it will extend its business to the field of slicing. It is expected to release the performance flexibility by virtue of the technical advantages of cutting equipment and consumables, and the profit per GW slicing may reach 16 million yuan.
The production of silicon wafer has been expanded aggressively, the trend of n-type silicon wafer has accelerated, and the demand for cutting equipment and consumables has increased rapidly. Silicon wafer is the most radical in the expansion of production in all links of the industrial chain. It is conservatively expected that 157gw of silicon wafer production capacity will be added in 2022, and the total production capacity may reach 550gw, which directly drives the growth of demand for cutting equipment, and the market space of cutting equipment is about 6.15 billion yuan. The gradual mass production of n-type silicon wafers also accelerated the process of slicing, resulting in an increase in slice line consumption. For example, the line consumption of 42 wire cutting increased by about 19% compared with 45 wire cutting. With the increase of silicon wafer output and the gradual introduction of superimposed lines 38 and 36, the unit line consumption will increase, and the demand for diamond line will increase rapidly. It is estimated that the market scale of diamond line will be about 3.74 billion yuan in 2022, or 5.54 billion yuan by 2025, with CAGR of 19.1%.
Cutting equipment and diamond wire tap to build a core technology system of “equipment + consumables + process”. The R & D expense rate of the company has remained above 8% throughout the year. Since joining the photovoltaic silicon wafer cutting equipment and diamond wire business in 16 years, the company has developed rapidly. So far, the fifth generation platform slicer has been launched, with mass production and sales of 38 μ M diamond wire has extensive and deep process accumulation in slicing know-how, and comprehensively constructs the technical system of “equipment + consumables + cutting process”. The company’s cutting business also extends to the fields of semiconductors, sapphires and magnetic materials. In the first three quarters of 2021, the total revenue of innovative business equipment and consumables was about 76 million yuan, realizing an increase of magnitude.
The business extends to chip OEM, and the improvement of yield brings significant performance flexibility and opens a new growth curve. In 2021, the company announced to jointly build 35gw slicing capacity in Leshan and Jianhu, and it is expected to form 16GW capacity by the end of 22. At present, the company has stably cooperated with Tonghe, Beijing Jingyuntong Technology Co.Ltd(601908) and other customers in Leshan, and the business model is beginning to take shape. It will further feed back the equipment and consumables business to form a closed-loop technical system. It is estimated that under the scenario of 50% surplus silicon wafers sold abroad, if the yield of the company’s slices reaches 97%, the profit per GW slice is expected to reach 16 million yuan; If the yield increases by 1%, the profit per GW is expected to increase by 3 million yuan, with significant performance elasticity.
Profit forecast and investment suggestion: as the leader of cutting and consumables, the company has prominent advantages under the trend of large-size wafer. The company’s slicing performance has been gradually realized since 22 years. It is expected that the net profit attributable to the parent company in the next three years will be 112.15%, 35 times PE in 22 years, the target price will be 74.6 yuan, and the “buy” rating will be given for the first time.
Risk warning: the risk that the global PV installation demand is less than expected; The risk that the downstream silicon wafer expansion is less than expected; The risk of rising raw material costs and declining profitability of the company; Risk of policy change
