Tianjin Zhonghuan Semiconductor Co.Ltd(002129) ( Tianjin Zhonghuan Semiconductor Co.Ltd(002129) ) the company’s performance rose sharply year-on-year, and continuous research and development promoted rapid development. The company achieved an operating revenue of 41.105 billion yuan in 2021, a year-on-year increase of + 115.70%; The net profit attributable to the parent company was 4.030 billion yuan, a year-on-year increase of + 270.03%; The earnings per share was 1.25 yuan / share, and the performance continued to show a high boom. The company implemented the concept of “innovation driven development” and adhered to the route of technology cost reduction. The annual R & D investment was 2.58 billion yuan, including 1.97 billion yuan for increasing production and reducing this category and 610 million yuan for technological innovation. Quarter by quarter, Q4 company achieved a revenue of 12.016 billion yuan in 21 years, a year-on-year increase of + 111.53%; The net profit attributable to the parent company was 1.268 billion yuan, a year-on-year increase of + 422.57%. In Q1 of 22 years, the operating revenue was 13.368 billion yuan, a year-on-year increase of + 79.13%; The net profit attributable to the parent company was 1.311 billion yuan, a year-on-year increase of + 142.08%.
Across the two high-tech fields of semiconductor and photovoltaic, mixed reform + equity incentive releases the vitality of the company. The company has been deeply engaged in photovoltaic and semiconductor industry for many years, and has grown into a global photovoltaic leading enterprise. The annual revenue of photovoltaic business reached 38.448 billion yuan, most of which was contributed by silicon chips. After taking shares in maxeon, the module business will usher in a period of rapid growth; The annual revenue of semiconductor business was 2.126 billion yuan, mainly contributed by semiconductor wafers. After the completion of the mixed reform, the marketization degree of the company is deepened, the cost control ability is significantly improved, and the incentive system is further improved. We believe that mixed reform + incentive is expected to further improve the corporate governance structure, improve the company’s long-term and effective incentive and restraint mechanism, and ensure the long-term, stable and healthy development of the company.
Photovoltaic: the photovoltaic industry continues to enjoy a high boom and promotes cost reduction and efficiency increase in a large scale. The photovoltaic industry is in a high business cycle. It is expected that the global installed capacity will exceed 230gw in 2022, a year-on-year increase of + 50%. The trend of large size and flake of silicon wafer will further promote the development of the industry. Relying on industry 4.0, the company has built a “G12 + laminated tile” dual technology platform through intelligent production to promote the rapid production of silicon wafers. With the commissioning of projects in Inner Mongolia and Ningxia, we expect that the silicon wafer production capacity will reach 140gw by the end of 2022, and the proportion of G12 will increase significantly. In terms of components, the company owns the patent of SunPower laminated tile and shares maxeon. The overseas sales channel has been improved. It is expected to enter the accelerated development period in 2022.
Semiconductor: the release of production capacity is imminent, and the expansion of customers is accelerated. Thanks to the development of automotive electronics, 5g Internet of things and intelligent manufacturing, the demand for chips such as PMIC, CIS and IGBT is on the rise. The company is committed to the supply of all comprehensive categories of semiconductor materials, with complete semiconductor products and dimensions. With the launch of the 8-12 inch phase II project of Wuxi base and the upgrading of the old production line, it is expected that the production capacity of the company’s 4-6 / 8 / 12 inch products will rise to 100 / 100 / 700000 pieces per month by the end of 2022. At present, the company’s semiconductor products cover many fields such as optoelectronics, sensors and separated components (o-s-d), logic chips, analog chips and storage chips. The product certification is advancing steadily. In the future, the production and sales of wafers are expected to continue to increase with the deepening of product certification.
Investment suggestion: we expect the company’s revenue from 2022 to 2024 to be RMB 800.74/860.91/91.920 billion respectively, with a growth rate of 95% / 8% / 7% respectively; The net profit attributable to the parent company was 6.153/82.11/9.571 billion yuan respectively, with a growth rate of 53% / 33% / 17% respectively. Corresponding to the PE multiple of the stock price on April 29, 20x / 15x / 13X, considering the growth of the company’s new energy and semiconductor business in the future and after the mixed reform + incentive, it is expected to fully release the vitality of the company and maintain the “recommended” rating.
Risk tips: the downstream demand is less than expected, the industrialization progress of 210 photovoltaic silicon wafer is less than expected, and the customer expansion of 12 inch semiconductor silicon wafer is less than expected
