\u3000\u3 Guocheng Mining Co.Ltd(000688) 599 Trina Solar Co.Ltd(688599) )
Event:
The company released its annual report for 2021 on April 26, 2022, realizing an operating revenue of 44.480 billion yuan, an increase of 51.20% year-on-year; The net profit attributable to the shareholders of listed companies was 1.804 billion yuan, a year-on-year increase of 46.77%, and the net cash flow from operating activities was 1.098 billion yuan, a year-on-year decrease of 63.37%.
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 14.14%, a year-on-year decrease of 1.83pct. The gross profit margin fell slightly due to the price rise of upstream silicon materials. The company’s comprehensive gross profit margins from Q1 to Q4 were 12.27% / 14.18% / 13.93% / 15.49% respectively. In 2021, the company’s net profit margin was 4.16%, a year-on-year decrease of 0.03pct. The company’s integrated production mode successfully transmitted the upstream silicon price to the downstream, and the gross profit margin and net profit margin were less affected. After the rapid release of production capacity in recent years, the company’s asset liability ratio was 71.41% at the end of 2021, with a year-on-year increase of 5.85pct.
With the combination of components and supports, Trina Solar will consolidate its leading position in large scale. In 2021, Trina Solar will deliver 24.8gw and 1.8gw of components and supports respectively. The company’s 210mm large-size component shipments ranked first in the world, with a cumulative shipment of more than 16GW. With continuous progress, several bases of Trina Solar were put into operation in 2021. By the end of 2021, the capacity of batteries and components had reached 35 / 50gw respectively, of which 210mm batteries accounted for more than 70%. The company expects that by the end of 2022, the capacity of batteries and components will reach 50 / 65gw respectively, with an increase of 42.86% / 30% respectively.
Multi battery technology direction layout, n-type battery Era
Trina Solar’s annual R & D expenditure in 2021 was 925 million yuan, another record high. Its TOPCON battery laboratory can mass produce batteries with a maximum efficiency of 25.42%. A 210mm large-scale TOPCON pilot line is newly built, and the average efficiency of mass production of batteries exceeds 24.5%. In April 2022, the company’s Suqian 8GW TOPCON battery project has been officially launched and is expected to be gradually put into operation in the second half of the year. In terms of hjt, Trina Solar has undertaken projects related to the industrialization of hjt batteries in the National 863 program. At present, the mass production efficiency of batteries has reached more than 24%. In addition, in 2021, the company will further layout industrial integration, joint venture 10gwh energy storage cell production line and 2gwh module production line, and its own system integration capacity 2gwh is gradually reaching production capacity.
Profit forecast and investment suggestions
Trina Solar is a leading enterprise in photovoltaic modules. It will continue to give full play to its advantages in batteries and modules. By the end of the year, it will have 50gw of battery capacity and 65gw of module capacity, vigorously develop high-efficiency TOPCON batteries and hjt batteries, and depict the next growth ambition. We estimate that the company’s revenue from 2022 to 2023 will be 87.82/100.28 billion yuan (original value: 73.88/96.85 billion yuan), and the net profit attributable to the parent company will be 3.53/4.66 billion yuan (original value: 3.34/3.87 billion yuan), respectively. Meanwhile, the company’s profit forecast for 24 years will be 125.5 billion yuan, the net profit attributable to the parent company will be 5.87 billion yuan, and the EPS will be 1.63/2.15/2.71 yuan / share, corresponding to 29.8/22.6/18.0 times of PE. Considering that the company has great growth potential and the compound 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, the target price is 65.2 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
