\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 438 Tongwei Co.Ltd(600438) )
Matters:
The company released its 2021 annual report and the first quarterly report of 2022. In 2021, it achieved a revenue of 63.491 billion yuan, a year-on-year increase of 43.64%, a net profit attributable to the parent of 8.208 billion yuan, a year-on-year increase of 127.5%, and a net profit of 8.486 billion yuan after deduction, a year-on-year increase of 252.35%; It is proposed to distribute a cash dividend of 9.12 yuan (including tax) for every 10 shares. In the first quarter of 2022, the revenue was 24.685 billion yuan, a year-on-year increase of 132.49%, and the net profit attributable to the parent company was 5.194 billion yuan, a year-on-year increase of 513.01%.
Ping An View:
The rapid growth of silicon business volume is the core driving force of the company’s performance growth. In 2021, the company’s net profit after deducting non-profit was RMB 8.486 billion, with a year-on-year increase of 252.35%. The substantial increase in performance was mainly contributed by the silicon material business. In 2021, the silicon material supply was in short supply, the price rose sharply and was in a state of huge profits; The gross profit margin of the other two core industries, photovoltaic cells and agriculture, decreased year-on-year and was in a state of low profit. In the first quarter of 2022, the silicon material price was running at a high level, and the substantial growth of performance was still mainly due to the silicon material business.
The sudden profits of silicon materials in the short term will continue, and the capacity expansion will be accelerated in the medium term. In 2021, the company’s polysilicon sales volume was 107700 tons, with a year-on-year increase of 24.3%, the revenue scale was 16.78 billion yuan, with a year-on-year increase of 214%, and the corresponding single ton revenue was 156000 yuan, with a year-on-year increase of about 152%; Due to the significant increase of sales price, the gross profit margin of silicon material business reached 71.8% in 2021, with a year-on-year increase of 35 percentage points. In the first quarter of 2022, due to the contribution increment of two polysilicon projects newly put into operation in the fourth quarter of 2021, the polysilicon sales volume of the company reached 48000 tons, and the estimated net profit per ton exceeded 100000 yuan. Since 2022, the price of silicon material has been at a high level. Considering the higher than expected demand for overseas photovoltaic installation and the impact of China’s epidemic on the production progress of new silicon material capacity, the price of silicon material is expected to basically maintain the current high level in the second and third quarters. In terms of production capacity, the 50000 ton Leshan phase II and 50000 ton Baoshan phase I projects were successively put into operation in 2021. By the end of 2021, the company’s polysilicon production capacity had reached 180000 tons; At present, the total capacity of the company’s projects under construction is 170000 tons, of which the 50000 ton project of Baotou phase II is expected to be put into operation in 2022 and the 120000 ton project of Leshan phase III is expected to be put into operation in 2023. At that time, the capacity scale of the company will reach 350000 tons; According to the company’s future plan, the company’s polysilicon production capacity will reach 8 Ping An Bank Co.Ltd(000001) million tons by 2026.
The bottom of the profitability of battery chips may accelerate the capacity expansion of new batteries. In 2021, the sales volume of batteries and components of the company was 34.93gw, with a year-on-year increase of 57.61%, and the gross profit margin of single crystal batteries was 8.28%, with a year-on-year decrease of about 8.5 percentage points. It is estimated that the battery and components business has a low profit. By the end of 2021, the company has built a total capacity of 45gw of battery chips, with large-scale capacity of 182 and above accounting for more than 70%. The mass production conversion efficiency of single crystal batteries has reached 23.53%. The average non silicon cost of single crystal perc batteries has been reduced to less than 0.18 yuan / W, a year-on-year decrease of 11%; At present, 7.5GW of Tonghe phase II and 8GW of Jintang phase II under construction will be put into operation in 2022 and 2023 respectively. In addition, the company plans to invest in the construction of 32gw high-efficiency crystalline silicon battery project in Meishan. According to the company’s plan, the battery chip capacity is expected to reach 80-100gw by the end of 2023. In 2021, the company focused on the goal of improving efficiency and reducing cost of the next generation battery technology under the condition of large-scale mass production, built the industry’s first GW level hjt production line, opened the 210mm size TOPCON technology development and successfully put into operation 1GW production line. It is expected that the subsequent new battery chip capacity will mainly adopt new battery technology.
The agriculture and animal husbandry sector and photovoltaic power station business grew steadily. In 2021, the company’s agriculture and animal husbandry sector achieved an operating revenue of 24.59 billion yuan, a year-on-year increase of 17.46%. Affected by fierce market competition and rising prices of raw materials, the gross profit margin of agriculture and animal husbandry sector was 9.48%, a year-on-year decrease of 1.2 percentage points; In 2021, the company signed the strategic cooperation framework agreement with Tech-Bank Food Co.Ltd(002124) to acquire all the assets of Tech-Bank Food Co.Ltd(002124) aquatic feed and some assets of pig feed. According to the company’s business plan, the agriculture and animal husbandry sector will strive to achieve an operating revenue of more than 27 billion yuan in 2022, with a year-on-year increase of more than 10%. In terms of photovoltaic power stations, the scale of photovoltaic power stations held by the end of 2021 is about 2.7gw, with a year-on-year increase of about 0.6gw. The power generation revenue in 2021 is 1.6 billion yuan, with a year-on-year increase of about 37%. The company strives to add 1GW of photovoltaic power stations in 2022.
Investment advice. Considering the supply and demand situation and price of silicon materials, the profit forecast of the company is adjusted. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 17.73 (original value of 11.2), 15.49 (original value of 11.7) and 12.51 (New) billion yuan respectively, EPS will be 394, 3.44 and 2.78 yuan respectively, and dynamic PE will be 8.9, 10.2 and 12.7 times. The long-term prospect of the photovoltaic industry is good. The company has core competitiveness in silicon materials and cells, and maintains the “recommended” rating of the company.
Risk warning. (1) Photovoltaic demand outside China is affected by many factors such as policy and epidemic situation, and there is a risk that it is less than expected. (2) The continuous expansion of silicon production capacity may lead to intensified competition and lower profitability than expected. (3) If the development speed of battery technology exceeds the expected capacity, the development speed of new battery technology may affect the development speed of battery technology.
