\u3000\u3 Shengda Resources Co.Ltd(000603) 185 Wuxi Shangji Automation Co.Ltd(603185) )
Get 4.3 billion silicon wafer orders from Jietai; From 2022 to 2025, a total of nearly 39 billion yuan was signed; Q1 silicon wafer prosperity upward
1) get the 4.3 billion silicon wafer order from battery chip enterprise Jietai Technology: according to the company’s announcement, from March 2022 to March 2025, Jietai ( Hainan Drinda Automotive Trim Co.Ltd(002865) holding 51%) and its subsidiary Hongye new energy (Jietai holding 48%) will purchase 648 million silicon wafers (estimated response is about 5GW) from Hongyuan new materials (Shangji silicon wafer subsidiary), with an estimated total amount of 4.342 billion yuan (tax included).
2) the predecessor of Jietai technology is the photovoltaic cell business of Zhanyu new energy. Zhanyu new energy is one of the leading enterprises in the photovoltaic cell industry, ranking third in the world in battery shipments in 2018 and fourth in the world in 2019 (according to pvinfolink data). In 2021, Jietai’s net profit reached 225 million yuan, and it plans to invest 11.2 billion yuan to build 16gwtopcon battery.
3) at present, the company’s customers have covered Trina Solar Co.Ltd(688599) , Atlas, Risen Energy Co.Ltd(300118) , Chint new energy, Tongwei Co.Ltd(600438) , Longheng new energy, Shanghai Aiko Solar Energy Co.Ltd(600732) , Jietai and other high-quality customers, including leading enterprises of high-quality component equipment and battery chips. From 2022 to 2025, the company has signed silicon wafer orders totaling nearly 39 billion yuan (according to the quotation of pvinfolink at the time of signing).
“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
1) monocrystalline silicon wafer: at present, the company’s monocrystalline silicon production capacity reaches 30GW. Further expansion of production is not ruled out in 2022. It is expected that the shipment volume is expected to more than double in 2022. At the same time, as the company’s self built slicing capacity gradually reaches the production capacity, there is room for further improvement of profitability. In 2022, the price of Q1 silicon wafer continued to rise, close to the new high in recent years. It is expected that the profitability of the company’s silicon wafer is expected to rise month on month.
2) silicon material + industrial silicon (completely self built): 150000 tons of high-purity industrial silicon + 100000 tons of high-purity crystalline silicon project is proposed. The first phase of the proposed 80000 tons of high-purity industrial silicon + 50000 tons of high-purity crystalline silicon project (corresponding to supporting about 18gw of monocrystalline silicon capacity), which is expected to reach production in 2023. At the same time, the government will provide the company with 3.8gw photovoltaic + 1.7gw wind power plant indicators, which is expected to ensure the company’s low price advantage.
3) granular silicon (share participation and 70% output locking): 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, with a share participation of 27%. 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. The project is expected to be put into operation in the third quarter of 2022 and is expected to bring new profit growth points to the company’s performance in 2022 and 2023.
The company’s upward integrated layout is “silicon wafer + silicon material + industrial silicon”. Silicon material is an area with high investment barriers in the photovoltaic industry. The company’s entry into silicon material will help ensure the raw material supply of the company’s silicon wafer and further improve the company’s comprehensive competitiveness and profitability in the industry.
2.5 billion convertible bonds have been issued: the conversion price is 145.66 yuan / share, and the placement of the original shareholders accounts for about 85% of the total amount of this issuance. This 2.5 billion convertible bonds have been issued (for the expansion of 10GW monocrystalline silicon production, which has reached the production capacity at present). The initial conversion price is 145.66 yuan / share, and the placement of the original shareholders accounts for about 85% of the total issuance.
Investment suggestions: high growth and low value; The target of the integrated layout of “silicon wafer + silicon material + industrial silicon” is expected to have a net profit of RMB 1.64/25/4 billion from 2021 to 2023, with a year-on-year increase of 208% / 54% / 60%; Considering 2.5 billion convertible bonds, PE is 29 / 19 / 12 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.
