\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 732 Shanghai Aiko Solar Energy Co.Ltd(600732) )
Key investment points
Event: the company issued performance reports for 2021 and the first quarter of 2022. In 2021, the company achieved a revenue of 15.47 billion yuan, with a year-on-year increase of 60.09%. The net profit attributable to the parent company was – 126 million yuan and the net profit deducted was – 281 million yuan. In the first quarter, the company achieved a revenue of 7.827 billion yuan, a year-on-year increase of 160.25%, a net profit attributable to the parent of 227 million yuan, a year-on-year increase of 125.81%, and a deduction of 185 million yuan of non net profit, a year-on-year increase of 263.82%.
Battery revenue continued to grow and profitability began to repair. In 2021, the company’s battery sales scale was further expanded, with an annual sales of 18.85gw of batteries, a year-on-year increase of 43.20%; The operating revenue was 15.471 billion yuan, a year-on-year increase of 60.09%. In the first quarter of 2022, the company achieved a revenue of 7.827 billion yuan, with a year-on-year increase of 160.25%. The sales of batteries were nearly 8GW, and the sales volume was further improved. The company’s profit of nearly 3.0 yuan per watt in the previous quarter has been gradually restored, as expected. We believe that the imbalance of the upstream and downstream capacity structure of the industrial chain and the uncertainty of the expansion of new battery technology will lead to the tight supply of large-scale battery capacity in 22 years and the strong certainty of battery profit repair.
The large size of the company will account for 95%, and its profitability is expected to rise quarter by quarter. The company has developed the transformation technology of upgrading 166mm size battery to 182mm size battery and slicing. Yiwu and Tianjin bases have started the transformation work, which is planned to be completed by June 2022. After the transformation, more than 95% of the company’s battery capacity can produce batteries with a size of more than 182 mm, and part of the capacity can be flexibly switched between batteries with a size of 182mm and 210mm. The subsequent company’s single watt profit will rise quarter by quarter.
ABC battery technology is progressing smoothly and mass production was completed in the third quarter. The 300MW battery pilot test line and 500MW module test line of ABC technology of the company are progressing normally. The 6.5gw ABC battery mass production project in Zhuhai has been successfully started. The project construction is progressing in an orderly manner. It is expected to be completed and put into operation in the third quarter of 2022. ABC has high technical patent barriers. After successful mass production, the company will have the first mover advantage of technology and fully enjoy the high gross profit brought by technology.
Sustained high-intensity R & D investment is expected to open up the ABC technology ecological chain. The company pays attention to technology research and development. In 2021, the company’s R & D expenses were about 650 million yuan, with a year-on-year increase of 70.93%. In 2022, the R & D expenses in Q1 were 227 million yuan, exceeding the whole year of 19 years, and continued to maintain high growth. By the end of 2021, the company had 1415 R & D personnel, accounting for about 21% of the total number of employees, which is at the leading level in the industry. In April 2022, the company established a wholly-owned subsidiary, Shenzhen saineng Digital Energy Technology Co., Ltd., which is committed to becoming the world’s leading energy solution company with photovoltaic as the core. The company shares the technology and patent achievements of 500MW ABC module experimental line to partners, provides customers with a package of solutions, and improves the substitution speed of new technologies for existing technologies.
Profit forecast and investment suggestion: the company is a leading company in the battery industry, and its performance begins to reverse, and the company’s ABC technology is expected to take the lead in mass production next year. We expect the net profit attributable to the parent company in 20222024 to be 1.534/23.18/3.933 billion yuan respectively, maintaining 30 times PE for 22 years and the target price of 22.5 yuan, maintaining the “buy” rating.
Risk warning: the downstream installed capacity demand has suddenly declined due to changes in the international situation; The risk of failure in the development of ABC battery technology.
