\u3000\u3 Shengda Resources Co.Ltd(000603) 185 Wuxi Shangji Automation Co.Ltd(603185) )
150000 high-purity industrial silicon and 100000 high-purity crystalline silicon projects were officially started; Upward integrated layout to enhance comprehensive competitiveness
Forenoon, 1, according to official WeChat official account of Wuxi Shangji Automation Co.Ltd(603185) : in the morning of April 8th, the 150 thousand high purity industrial silicon and 100 thousand high purity silicon project were held in Guyang County, Baotou, Inner Mongolia, marking the start of the project of self built silicon material + industrial silicon. This project is the second major photovoltaic industry project invested and constructed by the company in Baotou city. The company is a representative enterprise of major projects in Guyang county.
2) the company’s upward integrated layout is “silicon wafer + silicon material + industrial silicon”. 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) is expected to reach production in 2023. Assuming that the net profit per 10000 tons of silicon material will decline to 400 million yuan in 2023 (at present, the industry average is more than 1.3 billion), and the 50000 ton project of phase I will reach production in the middle of 2023 (assuming full production in the second half of the year), it is expected to increase the performance of the company by 1 billion yuan in 2023.
3) silicon material is a field with high investment barriers in the photovoltaic industry. The company’s entry into silicon material will help to ensure the supply of raw materials for the company’s silicon wafer, further improve the company’s industry comprehensive competitiveness and profitability, and solve the risk of profit fluctuation in a single link of silicon wafer. The project was announced in February 2022. Only in the past more than one month, the project has officially started, which is the embodiment of the company’s high executive power.
“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 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). Since 2022, the price of silicon wafer has 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 rebound.
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. 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.
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 issuance
The 2.5 billion convertible bonds have been issued (used to expand the production of 10GW monocrystalline silicon, 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; “Silicon wafer + silicon material + industrial silicon” integrated layout scarce target
It is estimated that the net profit from 2021 to 2023 will be RMB 1.64/25/4 billion, with a year-on-year increase of 208%/54%/60%; Considering 2.5 billion convertible bonds, PE is 25 / 16 / 10 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.
