\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 012 Longi Green Energy Technology Co.Ltd(601012) )
Event:
The company released its annual report for 2021 on April 26, 2022, realizing an operating revenue of 80.932 billion yuan, an increase of 48.27% year-on-year; The net profit attributable to shareholders of listed companies was 9.086 billion yuan, a year-on-year increase of 6.24%, and the net cash flow from operating activities was 12.323 billion yuan, a year-on-year increase of 11.87%.
Comments:
Subject to the rise of silicon material price, the gross profit margin decreased quarter by quarter
In 2021, the company’s comprehensive gross profit margin was 20.19%, a year-on-year decrease of 4.43pct, and the gross profit margin fell slightly due to the price rise of upstream silicon materials. Subject to the quarterly rise of silicon material price in 2021, the company’s comprehensive gross profit margin from Q1 to Q4 decreased quarter by quarter, 23.21% / 22.33% / 18.93% / 17.67% respectively. In 2021, the company’s net profit margin was 11.21%, a year-on-year decrease of 4.73 PCT, mainly due to the decline in the gross profit margin of silicon wafers, battery chips, components and other products. At the end of 2021, the company’s asset liability ratio was 51.31%, with a significant year-on-year decrease of 8.07pct, and the company’s production and management capacity continued to be optimized.
Shipments and production capacity increased, and the leading position was further consolidated
In 2021, Longji will deliver 70.01gw and 38.52gw of monocrystalline silicon wafers and components respectively. The company ranks first in the world in terms of component sales, market share and brand influence. It has achieved a leading market share in Asia Pacific, Europe, Middle East Africa and other countries and regions, and its leading position has been further consolidated. With continuous progress, Longji completed the upgrading and production of multiple bases in 2021. By the end of 2021, the production capacity of monocrystalline silicon wafer, battery and module reached 105 / 37 / 60GW respectively. The company expects that the production capacity of monocrystalline silicon wafer, battery and module will reach 150 / 60 / 85gw respectively by the end of 2022, with an increase of 42.86% / 62.16% / 41.67% respectively.
New battery technology outlines another growth curve
Longji invested 4.394 billion yuan in R & D in 2021, a record high, accounting for 5.43% of its operating revenue. Its n-type TOPCON battery and hjt battery constantly set new industry records and promoted the mass production of n-type battery as soon as possible. The company’s HPBC battery technology is expected to be put into operation in the third quarter of 2022. We expect Longji to develop BIPV standardized products and solutions with high-efficiency HPBC battery technology as the core in the future, and establish supporting capacity services. The company and Center International Group Co.Ltd(603098) will focus on the cooperative R & D, production and sales in the BIPV field and share the BIPV blue ocean market.
Profit forecast and investment suggestions
Longji is a leading enterprise in the photovoltaic industry. It will continue to give full play to its advantages in the silicon chip link, with a production capacity of 150gw silicon chips, and vigorously develop high-efficiency n-type batteries and HPBC batteries. Its leading position will continue. We estimate that the company’s revenue from 2022 to 2023 will be 137.12/157.48 billion yuan respectively (original value: 107.82/138.34 billion yuan), and the net profit attributable to the parent company will be 12.79/18.39 billion yuan respectively (original value: 107.5/12.78 billion yuan). At the same time, it will increase the 24-year profit forecast revenue to 190.1 billion yuan, the net profit attributable to the parent company will be 27.51 billion yuan, and the EPS will be 2.36/3.40/5.08 yuan / share respectively, corresponding to 26.0/17.8/11.9 times of PE. Considering that the company has great growth potential and the growth rate of net profit attributable to the parent company will exceed 40% in the next three years, we give the company 40 times PE in 22 years, slightly reduce the target price from 97.3 yuan to 94.4 yuan, and maintain the rating of “overweight”.
Risk tips
Overseas tariff policy changes, silicon material prices remain high, and the company’s new technology advances slowly
