\u3000\u3 China Vanke Co.Ltd(000002) 129 Tianjin Zhonghuan Semiconductor Co.Ltd(002129) )
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 41.1 billion yuan, a year-on-year increase of 115.7%, a net profit attributable to the parent company of 4.03 billion yuan, a year-on-year increase of 270.03%, and a deduction of non net profit of 3.883 billion yuan, a year-on-year increase of 307.56%. In the first quarter, the company achieved a revenue of 13.368 billion yuan, a year-on-year increase of 79.13%, a net profit attributable to the parent company of 1.31 billion yuan, a year-on-year increase of 142.08%, and a deduction of non net profit of 1.3 billion yuan, a year-on-year increase of 150.87%.
The production and sales volume of photovoltaic silicon wafers increased, and the penetration rate of G12 increased. In 2021, the company’s photovoltaic silicon wafer achieved a revenue of about 38.4 billion yuan, a year-on-year increase of 128.1%. The company shipped 8.21 billion square meters, about 51gw, a year-on-year increase of 35.09%. The total single crystal capacity of the company was increased to 88gw (of which G12 capacity accounted for about 70%), and Q1 was increased to 95gw (of which G12 capacity accounted for about 72%). In the crystal link, the silicon material consumption rate per unit product decreased by nearly 3% year-on-year, and the monthly production of a single silicon rod increased by 30%; In the wafer sector, the A-product rate of silicon wafer has increased significantly. At the same time, we have actively promoted projects such as thin line and thin sheet. Under the same thickness of silicon wafer, the number of pieces per kilogram has increased by 8% and the gross profit margin has increased to 22.73%.
Ningxia phase VI project is gradually reaching production capacity, and n-type silicon wafers are expected to gradually increase in volume. The company’s production capacity is gradually put into operation as planned. At present, the production capacity has reached about 100gw. 50gw (G12) Ningxia central phase VI project is progressing smoothly. It is expected that the company’s crystal production capacity will exceed 140gw by the end of 2022, and G12 advanced production capacity accounts for about 90%. In order to match the crystal production capacity, the company will accelerate the phase III and phase IV projects with an annual output of 25gwdw and 30gwdw. On the other hand, the company adheres to the differentiation route, pays attention to global cooperation, and has made breakthroughs in n-type silicon wafers. In the downstream n-type battery iteration, it is expected to take the lead in realizing the large-scale business of n-type silicon wafer with the first mover advantage of technology accumulation.
The quantity of laminated tile components began to increase, and the production capacity continued to increase. In 2021, the company’s photovoltaic module sales volume was 4.2gw, with a year-on-year increase of 120.76%, and the gross profit margin increased by 2.8 percentage points to 13.3%. As of the first quarter, the company’s G12 high-efficiency laminated tile component project in Jiangsu had achieved a production capacity of 8GW; The production capacity of G12 high efficiency shingle module project in Tianjin has been continuously increased, and 3gw has been achieved. It is expected to achieve about 20GW of shingle module capacity by the end of 2022.
The semiconductor business began to accelerate growth, and the 12 inch capacity was put into operation as planned. In 2021, the company’s shipments of polished wafer and epitaxial wafer products increased significantly, of which 8-12 inch products continued to increase. The phase II project in Inner Mongolia is put into operation, and the main construction of the new plant of the expansion project in Tianjin will be completed within 2021. The equipment will enter the plant in the second quarter of 2022, further expanding the production capacity of the company’s 8-inch and below power product base; The implementation of phase II of Jiangsu Yixing accelerated project has formed the capacity of 6-inch 500000 pieces / month, 8-inch 750000 pieces / month and 12-inch 170000 pieces / month by the end of 2021. It is expected that by the end of 2023, the company will achieve the capacity targets of 1.1 million pieces / month, 8-inch 1 million pieces / month and 12-inch Shanghai Pudong Development Bank Co.Ltd(600000) pieces / month.
Profit forecast and investment suggestions. Considering that Tianjin Zhonghuan Semiconductor Co.Ltd(002129) is a leading enterprise in the photovoltaic silicon wafer industry and the company is in a leading position in China in the field of semiconductor large-size silicon wafer, we maintain the target price of 67.5 yuan and maintain the “buy” rating.
Risk warning: the company’s production capacity fails to be released as scheduled; The cost of raw materials continued to rise, the global demand for photovoltaic installation was lower than expected, and the profitability of the company decreased; The risk that the company’s semiconductor silicon wafer is not progressing as expected.
