Tongwei Co.Ltd(600438) (600438)
Key investment points
Event: the company released the performance forecast for 2021. The company expects to realize a net profit attributable to the parent company of 8-8.5 billion yuan, an increase of 122% - 136% at the same time, and a net profit of 8-8.5 billion yuan after deducting non recurring profits and losses, an increase of 232% - 253% at the same time; In 2021q4, the net profit attributable to the parent company was RMB 2.06-2.56 billion, an increase of 646% - 828% at the same time. After deducting non recurring profits and losses, the net profit was RMB 2.07-2.57 billion, an increase of 317% - 418% at the same time. We expect that 2021q4 will have an impact on asset impairment and the operating performance is in line with expectations.
Silicon material shipments doubled in 2022: we expect about 27000 tons to be shipped in 2021q4 and about 100000 tons in 2021. The price of 2021q4 silicon material increased month on month, but the price of silicon powder also increased month on month (about 40000 yuan / ton). We expect the profitability to remain stable. In 2021q4, 50000 + 50000 tons will be put into operation, of which Leshan project is expected to be fully produced in February and Baoshan in April. In total, 2022q1 will contribute more than 10000 tons. We expect that the silicon material production capacity will reach 300000 tons + and the sales volume will reach 200000 tons by the end of 2022.
The inflection point of battery Q4 has been found, and the battery has been repaired. The company's Q4 battery business turns losses into profits. At present, the company's battery capacity in operation reaches 47.5gw, and another 7.5GW (Trina Solar joint venture) will be put into operation in 2022q2. The total capacity will exceed 55gw, of which 210 capacity will exceed 35gw. 2021q3 is the low point of battery profit, Q4 turns losses, and the inflection point appears. In 2022, the battery profit will be repaired, and the mass production of superimposed n-type batteries will continue to promote, which is expected to bring excess returns.
Profit forecast and investment rating: Based on the high prospect of PV and the consolidation of the company's leading position, we raised the net profit forecast of RMB 8.475/13.02/12.588 billion from 2021 to 2023 (the previous value was RMB 8.475/120.01/12.588 billion), a year-on-year increase of + 134.9% / + 53.4% / - 3.18%, corresponding to 22 / 15 / 15 times of PE from 2021 to 2023, maintaining the "buy" rating.
Risk tip: the policy is less than expected and the competition is intensified
