\u3000\u3 Guocheng Mining Co.Ltd(000688) 599 Trina Solar Co.Ltd(688599) )
Event: Trina Solar Co.Ltd(688599) disclosed that the net profit attributable to the parent company in Q1 of 2022 increased in advance, and the company realized a net profit attributable to the parent company of RMB 500600 million in Q1 of 2022, with a year-on-year increase of 117.19% – 160.63%; Deducting the net profit not attributable to the parent company of RMB 480580 million, an increase of 182.89% – 241.83% at the same time.
Under the background of rising prices in the industrial chain, the profit is relatively strong, and the profit in 2022q2 is gradually repaired: we expect the company to ship 7.5-7.8gw of Q1 components in 2022, with a month on month ratio of + 67% / + 4%. We estimate that the company’s single watt profit remains good from January to February, but the price of silicon wafer has increased sharply since March, and the price of adhesive film and glass has also increased by 10%. The pressure on the company’s cost side has increased, and the net profit of single watt has decreased in March. We expect the average profit in 2022q1 to be about 6 points, contributing 430480 million profits, In the context of rising prices in the industrial chain, the profitability of components is relatively strong. In 2022, there was strong demand for Q2 distributed in China and overseas. The company planned to ship 10-11gw in 2022q2. Since April, the company’s component price increased, transmission costs increased, and profits will be gradually repaired. In the second half of the year, the price of silicon material and silicon wafer decreased, which doubled the benefits of the company. The company shipped 40gw + in the whole year, realizing a simultaneous increase in volume.
Distributed systems are growing rapidly, tracking the break even of racks and smart energy: we expect the company to ship 1GW of distributed systems in 2022q1, confirm revenue of 0.7-0.8gw, about + 71% / + 37% month on month, contribute profits of 80-100 million, and achieve rapid growth. Throughout the year, the company benefited from the outbreak of distributed market, with shipments of 5-6gw, an increase of 200% + at the same time, becoming a new driving force for performance growth. The tracking support 2022q1 has improved month on month. However, due to the lack of obvious start-up of the demand for ground power stations and the high price of steel, it is still in break even. We expect to ship 3-4gw in 2022, doubling the growth. Increase R & D and market expansion of energy storage, and balance the overall profit and loss of 2022q1 smart energy.
Profit forecast and investment rating: Based on the fact that the photovoltaic demand in 2022 exceeds our expectations, the household distributed rapid growth, and the company’s distributed photovoltaic system makes efforts, we maintain the company’s profit forecast for 2022 and 2023. We predict that the net profit attributable to the parent company from 2021 to 2023 will be 1.91/38.1/5.15 billion, an increase of 55% / 100% / 35% at the same time, and the corresponding PE will be 58.86/29.46/21.76 times. We gave the company 45 times PE in 2022, corresponding to the target price of 80.1 yuan, maintaining the “buy” rating.
Risk tip: the policy is less than expected and the competition intensifies.
