Shanghai Hiuv New Materials Co.Ltd(688680) (688680)
The company’s sales of photovoltaic adhesive film products are rapid and large-scale, and the product structure is continuously optimized; After listing, the capital situation is improved and the profitability is expected to be improved; Accelerate the launch of new production capacity, which is expected to quickly increase the market share by taking advantage of the card position advantages of key customers on the basis of the centralization of component pattern; Overweight rating is given for the first time.
Key points supporting rating
Fast growing leading enterprise of photovoltaic adhesive film: the company is one of the leading enterprises in the photovoltaic adhesive film industry, with market share ranking among the top three in the industry. It was listed on the science and Innovation Board of Shanghai Stock Exchange in January 2021. Through R & D, the company has promoted the continuous expansion of product line, rapid and large-scale product sales, continuous optimization of structure, leading the industry with white EVA adhesive film, and the proportion of multi-layer coextrusion Poe adhesive film has increased rapidly. The first phase of the company’s employee stock ownership plan has been implemented, which is expected to attract, motivate and retain core technical talents and enhance core competitiveness.
The elasticity of photovoltaic demand is expected to be released, and the demand for adhesive film is expected to be improved: the photovoltaic industry chain has entered the price reduction channel, the deadlock of supply and demand game is expected to be alleviated, and the demand potential is expected to be gradually released. We estimate that the global PV installation demand from 2022 to 2023 will be about 220gw and 270gw respectively, and the corresponding PV module demand will be about 254gw and 312gw respectively. The unit consumption and technical route of photovoltaic adhesive film are relatively stable, and its demand is expected to increase with the growth of photovoltaic module demand. It is expected that the demand for photovoltaic adhesive film will reach 2.634 billion m2, 3.186 billion m2 and 3.901 billion M2 respectively from 2022 to 2024, with a year-on-year growth rate of 40.13%, 22.73% and 22.22% respectively. Limited by the release rhythm of new production capacity, the short-term supply and demand of EVA resin may still be tight, and the price of EVA resin may rise periodically. However, due to the decline of silicon material price and the existence of favorable price space in the adhesive film link, it is expected that the pressure on the overall profitability is small.
The capital situation is improved, and the share profit is expected to double up: the photovoltaic adhesive film industry has high requirements for the company’s overall liquidity and turnover capacity. The company’s capital is relatively tight before listing, the financing channels are not smooth, and the pace of production expansion is relatively limited. At the same time, it also bears a certain degree of profit loss at both ends of supply chain management and product sales. After listing, the company’s capital situation is improved and its profitability is expected to be improved. In addition, the company will accelerate the launch of new production capacity by taking advantage of listing and financing, and is expected to quickly increase the market share by taking advantage of the card position advantages of key customers on the basis of the centralization of component pattern.
Valuation
Under the current share capital, combined with the company’s recent situation and upstream and downstream supply and demand, we expect the company to achieve earnings per share of RMB 2.83/7.02/9.34 from 2021 to 2023, corresponding to a P / E ratio of 94.5/38.1/28.7 times; Overweight rating is given for the first time.
Main risks of rating
Price competition exceeds expectations; Adverse fluctuations in raw material prices; Downstream demand does not meet expectations; Power and production restrictions exceed expectations; The impact of covid-19 epidemic exceeded expectations; Photovoltaic policy did not meet expectations.
