\u3000\u3 Shengda Resources Co.Ltd(000603) 185 Wuxi Shangji Automation Co.Ltd(603185) )
It is planned to increase 50000 tons of polysilicon by 6 billion, and the project has been officially started; It will guarantee the company’s 18gw silicon wafer production capacity
1) according to the announcement of the company, the company plans to increase the production capacity of 50000 tons of polysilicon by 6 billion yuan, of which 4.2 billion yuan is used for 50000 tons of polysilicon project and 1.8 billion yuan is used to supplement working capital. The company has announced that it plans to build 150000 tons of high-purity industrial silicon + 100000 tons of high-purity crystalline silicon project. The proposed phase I project with a capacity of 80000 tons of high-purity industrial silicon + 50000 tons of high-purity crystalline silicon (corresponding to supporting about 18gw of monocrystalline silicon capacity) is expected to reach production in 2023.
Forenoon 2) project progress: according to official WeChat official account, the 150 thousand high purity industrial silicon and 100 thousand high purity silicon project were held in Guyang County, Baotou, Inner Mongolia on the morning of April 8th, marking the start of the project of self built silicon material + industrial silicon.
3) will increase the company’s performance. The company’s upward integrated layout is “silicon wafer + silicon material + industrial silicon”. Assuming that the net profit per 10000 tons of silicon material will decline to 400 million yuan in 2023 (with the release of silicon material capacity and loose supply. At present, the industry average is more than 1.3 billion), the 50000 ton project will reach the production capacity in the middle of 2023 (assuming full production in the second half of the year), which is expected to increase the performance of the company by 1 billion yuan in 2023.
4) 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.
Release of the second phase of equity incentive plan: covering a wide number of people and stimulating the vitality of core backbone employees
The company issued the second phase of equity incentive plan: 914 incentive objects, covering core backbone employees, accounting for 1.19% of the share capital. Among them, stock options account for 59%, and the exercise price is 110.9 yuan; Restricted stocks accounted for 41%, and the exercise price was 69.31 yuan. Unlocking conditions: Based on the company’s operating revenue or net profit in 2021, the company’s revenue or net profit in 20222024 will increase by no less than 10%/20%/30% year-on-year in 2021 (only one of the conditions of revenue and net profit is required).
“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 leading enterprises of high-quality component equipment + leading enterprises of battery wafer. From 2022 to 2025, nearly 39 billion yuan of silicon wafer orders have been signed (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), meet the silicon material demand of 25gw silicon wafer, and strengthen the silicon material guarantee and silicon wafer competitiveness. The project is expected to be put into operation in the third quarter of 2022.
Investment suggestions: high growth and low value; The target of the integrated layout of “silicon wafer + silicon material + industrial silicon” is expected to have a net profit of RMB 1.64/25/4 billion from 2021 to 2023, with a year-on-year increase of 208% / 54% / 60%; Considering 2.5 billion convertible bonds, this 6 billion additional issuance is not considered for the time being, and the corresponding PE is 24 / 16 / 10 times. The 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
