\u3000\u3 Guocheng Mining Co.Ltd(000688) 599 Trina Solar Co.Ltd(688599) )
The company released the annual report of 2021 and the first quarterly report of 2022, and the profit was + 47% / + 136% year-on-year respectively. The profitability of the company’s components is expected to improve, the performance of each sector is better, and new technologies are actively deployed; Maintain the overweight rating.
Key points supporting rating
The profit in 2021 increased by 47% year-on-year, and the profit in 2022q1 increased by 136% year-on-year: the company released the annual report of 2021, realizing a revenue of 44.480 billion yuan, a year-on-year increase of 51.20%, a net profit attributable to the parent company of 1.804 billion yuan, a year-on-year increase of 46.77%, and a deduction of non net profit of 1.548 billion yuan, a year-on-year increase of 39.16%. The company also released the first quarterly report of 2022, realizing a revenue of 15.273 billion yuan, a year-on-year increase of 79.20%, and a net profit attributable to the parent of 543 million yuan, a year-on-year increase of 135.97%. The results of the company’s annual report and the first quarterly report are in line with expectations.
Continuous large-scale component volume: in 2021, the company shipped 24.81gw of components, with a year-on-year increase of 55.92%, of which 210 large-scale shipments exceeded 16GW, accounting for about 65%. The revenue of component sector increased by 55.97% year-on-year to 34.395 billion yuan; Affected by the rising price of silicon material, the gross profit margin of the sector decreased by 2.47pcts to 12.43% year-on-year, and the unit net profit was about 0.079 yuan / W. In 2022, the price of Q1 silicon is still fluctuating at a high level. The overall gross profit margin of the company is 13.59%, up 1.32pcts year-on-year and down 1.90pcts month on month. We judge that with the easing of silicon supply bottleneck in the second half of the year, the profitability of component business is expected to rebound.
The performance of each sector is good: in 2021, the company shipped more than 2gw of distributed systems and 1.8gw of supports. The revenue of system products increased by 14.31% to 4.564 billion yuan year-on-year, and the gross profit margin increased by 2.55pcts to 17.13% year-on-year; In terms of power station business, the company achieved an index of more than 3.5gW during the year, with a year-on-year increase of more than 200%. At the same time, the company sold 818.73mw power station, contributing 317 million yuan to the current operating performance.
Rapid release of production capacity and active layout of new technologies: in 2022, the company plans to expand the production capacity of components and batteries by 15gw, and the production capacity of the two is expected to reach 65gw and 50gw respectively by the end of the year. In terms of new technologies, the average production efficiency of the company’s TOPCON pilot line has exceeded 24.5%. The 8GW TOPCON battery project has been officially launched in April 2022 and is expected to be gradually put into operation in the second half of the year.
Valuation
In combination with the company’s annual demand of 20212022 / 17, the diluted earnings per share is adjusted to 20212022.32/21, corresponding to the company’s annual report of 20212022.32 (the original earnings per share is adjusted to 20212022.32); Maintain the overweight rating.
Main risks of rating
Policies fail to meet expectations; The decline in raw material costs did not meet expectations; Price competition exceeds expectations; International trade friction risk; Technical iteration risk; The impact of covid-19 epidemic exceeded expectations.
