\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 61 Yangling Metron New Material Co.Ltd(300861) )
There is no worry about the medium-term demand of the photovoltaic industry, and the demand for diamond line is expected to maintain rapid growth. The company has a solid leading position in the diamond line industry, high-quality customer structure and leading R & D strength. It is expected to continue to lead the industry in reducing costs and increasing efficiency, and its performance is expected to maintain rapid growth; For the first time, the company will give an overweight rating.
Key points supporting rating
Diamond line is the leading industry with the highest profitability: the company was established in July 2015 and listed on the gem of Shenzhen Stock Exchange in August 2020. As of September 2021, the annual production capacity of the company's diamond line has exceeded 70 million kilometers. At present, the company is the largest diamond line manufacturer in the world with leading market share. Taking advantage of its own industrial chain advantages and technology accumulation, the company timely realizes the R & D and mass production sales of new products with finer line diameter, superimposes its own continuous cost reduction, and leads the industry in terms of profitability.
The demand for photovoltaic diamond wires is expected to maintain rapid growth: we expect the global photovoltaic installed demand to be about 220gw, 280gw and 350gw respectively from 2022 to 2024. With the expectation that the demand for photovoltaic terminals will continue to improve, the silicon wafer production capacity will expand rapidly. Since 2020, the total planned production expansion of monocrystalline silicon rods and wafers in the industry has exceeded 360gw and 280gw respectively. In addition, the thin silicon wafer promotes the development of bus to thin wire, and the consumption of diamond wire is expected to increase. Driven by the improvement of downstream demand and consumption, the demand of diamond line is expected to grow rapidly. We predict that the global demand for diamond wire is expected to reach 116 million kilometers in 2022, with a year-on-year growth rate of about 46%; Demand is also expected to maintain rapid growth from 2023 to 2025.
With multiple advantages, the leading position is stable: the company has multiple advantages such as technology, production capacity, cost and customers, and the leading position of the company is expected to remain stable. In terms of technology, the company has mastered a full set of core technologies of diamond line production, and has a strong competitive advantage compared with its peers in terms of production efficiency and yield. In terms of production capacity, the company promotes the technical transformation of "single machine and twelve lines" and the production capacity increases rapidly. It is expected that by the end of 2022, the company's annual production capacity of diamond line is expected to reach 125 million km, which is expected to boost the company's market share and further highlight the dilution of cost by scale advantage. In terms of cost, the company realizes the self supply of some buses, independently expands the yellow wire production capacity and improves the self supply rate, which is expected to significantly reduce the cost of raw materials. In terms of customers, the company has become the core supplier of downstream front-line enterprises and basically covers other major enterprises, and is expected to improve customer stickiness by fully meeting customized needs.
Valuation
Under the current share capital, we expect the company to achieve earnings per share of 1.89/2.80/3.62 yuan from 2021 to 2023, corresponding to a P / E ratio of 36.4/24.7/19.1 times; For the first time, the company will give an overweight rating.
Main risks of rating
Price competition exceeds expectations; Cost advantage is reduced beyond expectation; The cost of raw materials rose more than expected; Technical iteration risk; Photovoltaic policy risk; The impact of the epidemic exceeded expectations.
