\u3000\u3000 Wuxi Shangji Automation Co.Ltd(603185) (603185)
Locked price of 2.5 billion convertible bonds: 145.66 yuan / share, credit rating AA -; The company’s monocrystalline silicon production capacity has reached 30GW
The initial conversion price of this 2.5 billion convertible bond (used for the expansion of 10GW monocrystalline silicon, which has reached the production capacity at present) is 145.66 yuan / share, which will be preferentially placed to the original shareholders of the company. The credit rating is AA – (the same as the last convertible bond), and the issuance fee is expected to be 23.46 million yuan
It is proposed to build 100000 tons of silicon material + 150000 tons of industrial silicon; Phase I will reach production capacity in 2023 to ensure the company’s 18gw monocrystalline silicon production capacity
1) proposed 150000 tons of high-purity industrial silicon + 100000 tons of high-purity crystalline silicon project: the total investment of the project is expected to be 11.8 billion yuan. Among them, high-purity crystalline silicon is the raw material for the company to produce monocrystalline silicon, and high-purity industrial silicon is the raw material for the production of high-purity crystalline silicon. Assuming a conservative calculation of 0.28g/w silicon consumption, it can support the company’s annual monocrystalline silicon production capacity of about 36gw.
2) the project is implemented in two phases: the first phase is to build a project with a capacity of 80000 tons of high-purity industrial silicon + 50000 tons of high-purity crystalline silicon (corresponding to the capacity of about 18gw monocrystalline silicon). The total investment is expected to be 6 billion yuan, and the production is expected to be reached in 2023. The phase II project will be promoted according to the market situation, and the company and Guyang county government will sign the project investment agreement.
3) construction site: Guyang County, Baotou, Inner Mongolia, and the company’s monocrystalline silicon production capacity are in Baotou, providing strong support for silicon material guarantee.
4) project support: Guyang county government will ensure that the above site selection meets the requirements of project site selection. At the same time, the company will be provided with a total of 3.8gw photovoltaic power plant index and 1.7gw wind power plant index, and the project will be declared and implemented in batches. The company’s integrated layout of “silicon wafer + silicon material + industrial silicon” will further enhance the company’s industry comprehensive competitiveness and profitability.
Granular silicon project: strengthen the competitiveness of silicon wafers and bring profit growth points; Recently, the granular silicon project has been recognized by the new capital
1) the company has increased its capital by 1.02 billion yuan and jointly invested in the project with an annual output of 100000 tons of granular silicon + 150000 tons of high-purity nano silicon. At present, Jiangsu Zhongneng, Wuxi Shangji Automation Co.Ltd(603185) , Gaojia Cecep Solar Energy Co.Ltd(000591) and Tibet Ruihua hold 55%, 27%, 2.6% and 15.4% shares of Inner Mongolia Xinyuan respectively (the total investment of the project is expected to be 8.9 billion yuan). After putting into operation, the machine will obtain no less than 70% of granular silicon (corresponding to 70000 tons), which can meet the silicon material demand of 25gw silicon wafer in the future, and strengthen the silicon material support ability and the core competitiveness of silicon wafer.
2) the granular silicon + nano silicon project is expected to be put into operation in the third quarter of 2022, bringing new major profit growth points. We expect to bring new profit growth points to the company’s performance in 2022 and 2023.
“Silicon wafer + silicon material + industrial silicon” is an upward integrated scarce target, and strive to break through the areas with high investment barriers in the industrial chain
The company’s upward integrated layout is “silicon wafer + silicon material + industrial silicon”. Silicon material is a field with high investment barriers in the photovoltaic industry. The company’s entry into silicon material will help to ensure the raw material supply of the company’s silicon wafer.
Investment suggestions: high growth and low value; “Silicon wafer + silicon material + industrial silicon” integrated layout scarce target
It is estimated that the net profit from 2021 to 2023 will be 1.64/25/4 billion yuan, with a year-on-year increase of 208% / 54% / 60%; Considering 2.5 billion convertible bonds, PE is 26 / 17 / 11 times, and PE valuation is low in the industry. Maintain the “buy” rating.
Risk tip: the sharp expansion of production leads to the deterioration of the competition pattern, the price rise of silicon material affects the terminal demand, and the risk of technology iteration
