\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 438 Tongwei Co.Ltd(600438) )
The scale advantage is significant, and the polysilicon production expansion plan is stable and can be expected. The 50000 tons of Baotou phase II and 120000 tons of Leshan phase III are planned to be put into operation in 2022 and 2023 respectively. The namesector capacity will reach 230000 tons by the end of 2022 / 2023, and the planned capacity from 2024 to 2026 will be 800000 ~ 1 million tons, ranking first in the industry.
Cost reduction, factor switching, intensive cultivation and consolidation of cost advantages. With the marginal decline of scale effect of equipment investment and the rise of raw fuel prices, the polysilicon industry has gradually transitioned from capital expenditure driven cost reduction to technological progress driven cost reduction, which puts forward higher requirements for enterprise technological innovation and lean management. The company has been in the polysilicon industry for more than ten years, and its technology and fine management level are ahead of its peers. In 2021, the lowest production cost of the company’s new capacity has reached 33700 yuan / ton, a year-on-year decrease of 7.2%, and the cost advantage is stable.
“Key marginal cost” determines the bottom and fluctuation center of silicon material price. The price support point at the bottom of the cycle is determined by the cash cost of marginal production capacity, and the price bottom corresponds to about 70 ~ 80 yuan / kg in the next 2-3 years; With the gradual liquidation of high-cost production capacity in the future, the long-term price center can be estimated according to the “full cost of new entrants + meager profit that is not attractive to the expansion of production”, which corresponds to about 80 ~ 90 yuan / kg. At that time, the net profit center of leading enterprises per ton will be 20 ~ 30 yuan / kg.
Dislocation integrated layout escorts the battery business. Through mutual equity participation and dislocation layout with downstream companies, the company ensures the supply of battery raw materials and operating rate, and consolidates the cost advantage of non silicon. In 2021, the utilization rate of battery capacity was 99.47%, significantly ahead of the industry. The excess profit of polysilicon also provides sufficient financial support for the company’s research and development of new battery technology. The company has laid out new battery technologies such as hjt and TOPCON for many years. It is expected to accumulate and enjoy the excess profit brought by technology iteration in the future.
Adhere to professional division of labor and lean management, and position the role of “workshop director” in the industrial chain. The company is committed to being the best enterprise in the subdivided field. The enterprise gene of lean management enables the company to achieve the ultimate cost control while ensuring the product quality, making a great contribution to the reduction of photovoltaic kwh cost. In terms of new battery technology in the future, the company also adheres to the business philosophy of closely tracking downstream demand, timely expanding investment and providing customers with low-cost and high-quality products, so as to maximize capital and management advantages.
Convertible bond fund-raising escorts the expansion of production, and employee stock ownership shows confidence. In February this year, the company officially launched 12 billion convertible bonds to ensure the expansion of Leshan and Baotou phase II polysilicon projects and 15gw single crystal rod cutting projects. In May, the company released the employee stock ownership plan to bind senior executives and core employees and stabilize the competitive advantage.
Profit forecast and investment suggestions
Recently, the prosperity of the industry exceeded expectations, and the net profit for 22-24 years was slightly increased to 18.4/187/20.1 billion yuan, corresponding to EPS of 4.08/4.15/4.46 yuan. Considering the dominant position of polysilicon and the increasing trend of battery profitability, the company was given 15 times PE for 22 years, corresponding to the target price of 61.23 yuan / share, maintaining the “buy” rating. The current market value still has a good valuation safety margin corresponding to the low profit of the silicon material cycle in the future. The subsequent silicon material price exceeds expectations, the continuous repair of battery chip profits and the realization of strong profits are expected to become a stock price catalyst.
Risk tips: irrational expansion of the industry and international trade risks; The construction progress of new projects is slower than the expected risk; Risk of demand growth falling short of expectations.
