\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 42 Wuxi Dk Electronic Materials Co.Ltd(300842) )
Event:
The company released its annual report for 2021 on March 9, 2022, realizing an operating revenue of 2.814 billion yuan, a year-on-year increase of 77.96%; The net profit attributable to shareholders of listed companies was 94 million yuan, a year-on-year increase of 14.43%, and the net cash flow from operating activities was – 259 million yuan, an increase of 261 million yuan compared with the same period last year.
Comments:
Suppressed by the high silver price, the company’s gross profit margin decreased
The company’s demand was suppressed by the company’s gross profit rate of 10.31% and 12.00% respectively to 273.00% in 2023, with the gross profit rate of 12.00% and 12.00% respectively. In 2021, the company’s net interest rate was 3.34%, a year-on-year decrease of 1.85pct, of which the net interest rates from Q1 to Q4 were 4.67% / 5.09% / 2.86% / 0.32% respectively, and the net interest rate bottomed out in the fourth quarter. The net profit attributable to the parent company was 94 million yuan, with a year-on-year increase of 14.43%, deducting 105 million yuan of non attributable net profit, with a year-on-year increase of 31.60%. Silver futures and foreign exchange derivatives constituted the main non recurring losses in this year.
The expansion of n-type battery has promoted the volume and price of silver paste
The advent of the n-type battery era will not only reduce the silver slurry brought by the hedging fine grid, but also further improve the company’s gross profit margin. Pvinfolink predicts that the capacity of hjt and TOPCON will be 23gw and 42GW in 2022, and the n-type battery will officially enter the stage of mass production. In 2021, the positive silver consumption of p-type battery is about 71.7mg/piece and the back silver consumption is about 24.7mg/piece, while the consumption of silver aluminum paste superimposed back silver on the front of TOPCON battery is about 145.1mg/piece, and the consumption of low-temperature silver paste on both sides of heterojunction battery is as high as about 190mg / piece. In addition, the price of high-temperature silver paste for TOPCON and low-temperature silver paste for hjt is higher than that of high-temperature silver paste for perc. The transformation to n-type battery means that the volume and price of silver paste rise together.
Vigorously invest in research and development to meet the era of n-type battery
In 2021, the company increased its investment in silver slurry research and development, with an annual R & D cost of 98 million yuan, a year-on-year increase of 71.78%. The company’s low-temperature sintered silver paste, hjt silver paste and new-type ultra-fine linear front silver paste have been industrialized. High efficiency n-type nano silver coating and doped conductive silver paste and TOPCON battery boron extended emitter contact silver aluminum paste are in the pilot stage. At the same time, many semiconductor packaging technologies, including nano packaging and heat dissipation electronic materials, are in the pilot stage. Joint research and development of multiple projects will provide multiple growth points for the company in the future.
Huge space for localization and increase market share
In 2020, the localization proportion of silver slurry is only 50%, and the proportion of n-type silver slurry is as low as 20%. Chinese manufacturers have gradually shifted from the original cost competition to performance competition and technology catch-up, and there is a huge space for n-type slurry replacement. The company’s new generation dk71a front silver aluminum paste adopts inorganic strategy to greatly reduce shading and improve short-circuit current. It has assisted customers in mass production of TOPCON batteries with an efficiency of more than 24.5%. In 2021, the company completed the sales volume of 492.27 tons of positive silver paste, with a year-on-year increase of 49.97%. It continues to benefit from the continuous improvement of new photovoltaic installed capacity under the background of double carbon, and the market share is expected to be further improved.
Profit forecast and investment suggestions
The company is a leading enterprise of domestic photovoltaic silver paste. Its customers include head cell manufacturers such as Tongwei, Jingke, Trina Solar and Jingao. It will continue to benefit from the development of photovoltaic industry and the iteration of n-type high-efficiency cells. We expect the company’s revenue to be 4.340/6.032/7.77 billion yuan from 2022 to 2024, and the net profit attributable to the parent company to be 1.67/2.59/399 billion yuan respectively, corresponding to 34.78/22.52/14.59 times of PE, We gave the company 50 times PE for 22 years, with a target price of 83.5 yuan, maintaining a “buy” rating.
Risk tips
The growth rate of photovoltaic installed capacity was lower than expected, and the international silver price fluctuated greatly
