\u3000\u3 Guocheng Mining Co.Ltd(000688) 556 Qingdao Gaoce Technology Co.Ltd(688556) )
Event: on April 7, 2022, the company announced to invest in the construction of Jianhu (phase II) 10GW photovoltaic large silicon wafer project.
Key investment points
The leader of slicer was transformed into slicing OEM, and the OEM logic gradually confirmed the acceleration of production expansion: Qingdao Gaoce Technology Co.Ltd(688556) is the leader of slicer with a market share of more than 50%. In 2021, it was transformed into slicing OEM. Previously, it was planned to have a capacity of 35gw (Large silicon wafer demonstration project 5GW + Leshan 20GW + Jianhu 10GW). Due to the strong demand for slicing OEM, it was announced on April 7 to expand the lake (phase II) 10GW large silicon wafer project. Up to now, the total planned slicing OEM capacity is 45gw. Jianhu phase II is expected to be put into operation in two stages in 2023 and 2024 (we expect that if the demand is strong, the pace of operation may be advanced). The chip OEM capacity is built based on customer needs. The supporting customers of the new 10GW capacity are battery chip manufacturers Runyang and Yingfa Ruineng (Trial cutting has been made before, and the customer highly recognizes the delivery volume and silicon chip quality).
The expansion of chip OEM has accelerated, and the total capacity has been increased from 35gw to 45gw: according to the production rhythm planned by the company, we expect the capacity to reach 21, 40 and 45gw respectively from 2022 to 2024. Considering the ramp up of production capacity, we predict that the shipment volume from 2022 to 2024 will be 12, 25 and 45gw respectively. (1) Large silicon wafer demonstration project (5GW, supporting Tongwei and huantaimeike): it will be started in March 2021 and reach production in December 2021. (2) Leshan large silicon wafer project (20GW): the first phase of 6Gw supporting Beijing Jingyuntong Technology Co.Ltd(601908) , which was started in August 2021, is currently climbing production, and is expected to reach production in 2022q2; Phase II 14gw is expected to reach production in 2023. (3) Yancheng Jianhu Lake (20GW): phase I of which is 10GW supporting Jinzhou sunshine. The construction will start in September 2021 and is expected to reach the production capacity in 2022q3; Phase II 10GW is supported by Runyang and Yingfa Ruineng, which are expected to reach the production capacity of 5GW from 2023 to 2024 respectively (the supporting customers may be dynamically adjusted according to the needs of customers).
Specialized division of labor improves the efficiency of the industrial chain, and the new business of chip OEM brings high performance flexibility: for Qingdao Gaoce Technology Co.Ltd(688556) for, the income source of chip OEM is OEM fee + silicon mud recovery + surplus silicon wafer sold. OEM fee + silicon mud recovery can cover the cost, and the surplus silicon wafer is profit. At present, the company’s unit silicon material can be cut by 8% more than the customer, making 3% profit to the customer and 5% retention. The profit of single GW remains high. Even considering the subsequent decline in the price of silicon wafer (historically, when the price of silicon material is low, the price of silicon wafer per W is 0.55 yuan), we conservatively expect that the profit of single GW can be maintained at more than 20 million, and the release of production capacity will bring high performance elasticity. For customers, the cost of their own slicing is compared with the OEM fee. At the same time, customers can obtain 3% more silicon wafers, so the comprehensive cost of slicing under the OEM mode is lower. At the same time, OEM can help customers light asset operation.
Profit forecast and investment rating: the downstream photovoltaic industry has a high outlook, and the company continues to benefit as the leader of slicing equipment & consumables; At the same time, develop the chip OEM business, which is expected to usher in new performance growth points. We raised the net profit attributable to the parent company from 2021 to 2023 to RMB 1.7/4.0 (up 14%) / 630 (up 17%) billion, corresponding to PE of 61 / 26 / 17x respectively, maintaining the rating of “overweight”.
Risk tip: the industry is affected by policy fluctuations, and the business expansion is less than expected.
