Shuangliang Eco-Energy Systems Co.Ltd(600481) (600481)
Event: Shuangliang Eco-Energy Systems Co.Ltd(600481) issued the announcement on signing major sales contracts by wholly-owned subsidiaries.
Together with the three major customers, the total contract amount of newly signed orders is expected to be RMB 12.144 billion. According to the announcement of the company, Shuangliang silicon materials, a wholly-owned subsidiary of the company, signed the procurement contract of silicon wafer or single crystal square bar frame with Funing atlas Photovoltaic Technology Co., Ltd., Jiangsu Xinchao photovoltaic energy development Co., Ltd. and Changzhou Shunfeng Cecep Solar Energy Co.Ltd(000591) Technology Co., Ltd. Among them, The company plans to deliver 22800 tons of single crystal square rods (including 182mm and 210mm specifications) to atlas, 9720 tons of single crystal square rods (including 182mm and 210mm specifications) to Jiangsu Xinchao, and about 300 million single crystal silicon wafers to Changzhou Shunfeng from January 1, 2022 to December 31, 2024 (unlimited size, based on 182mm specification). According to the latest quotation of pvinfolink, the company expects the total amount of three sales contracts from 2022 to 2024 to be RMB 12.144 billion (including tax).
New players of silicon wafer have won orders repeatedly, and the new production capacity has been supported by downstream orders to ensure the release of production capacity next year. Since this year, the company has actively accelerated the expansion of silicon wafer production. According to company news, on September 30, The company’s monocrystalline silicon phase I Project (20GW) was successfully ignited and put into operation. On October 5, the company realized mass production of large-size monocrystalline silicon rods. The company’s silicon wafer capacity continued to be released. Before today’s announcement, the company had worked with Longheng new energy and Shanghai Aiko Solar Energy Co.Ltd(600732) . Runyang Yueda signed orders for a total of 4.35 billion monocrystalline silicon chips, including 950 million for Longheng new energy, 2.1 billion for aixu and 1.3 billion for Runyang; Delivery is planned from January 1, 2022 to December 31, 2024. The company’s silicon wafer framework orders are full, providing order and customer support for the subsequent release of new production capacity, and steadily promoting the release of new production capacity.
The downward price of raw materials is expected to stimulate downstream demand, and new orders fully demonstrate downstream confidence in the company’s products. Since this year, the high price of upstream raw materials has increased the installation cost of downstream owners, affecting some demand this year. With the release of upstream production capacity, the price of upstream raw materials is expected to drop significantly next year, which is expected to stimulate the increase of downstream demand. Under the background of uncertainty in the current industrial chain price, the company has successively signed silicon wafer orders, highlighting the downstream customers’ certainty of demand and trust in the company’s products.
The expansion of silicon production continued, and the business orders of reduction furnace maintained a high boom. The company is the leader of polysilicon reduction furnace in China. Since this year, the expansion of silicon material production has accelerated significantly. The company has abundant equipment orders. Since this year, the newly signed orders of reduction furnace have exceeded 2 billion yuan, providing stable support for the release of reduction furnace performance in the next two years, and the company’s reduction furnace business has maintained a high boom.
Profit forecast: it is expected that the company will realize net profit attributable to parent company of 280, 613 and 827 million yuan from 2021 to 2023, corresponding to 61.1, 27.9 and 20.7 times of valuation, and maintain the “overweight” rating.
Risk tip: the industry demand does not meet expectations and the company’s production capacity does not meet expectations.
