Longji (601012) Interim Report Comments: Slightly Exceeds Shen Wanhongyuan’s Expectation to Accelerate the Expansion of Wafer Capacity

Longji (601012) Interim Report Comments: Slightly Exceeds Shen Wanhongyuan’s Expectation to Accelerate the Expansion of Wafer Capacity
Event: The company released its semi-annual report for 2019 on August 28, 2019.Reported first-tier company operating income of 141.11 ‰, an increase of 41 per year.09%; realized net profit attributable to mother 20.10 ‰, an increase of 53 per year.76%. Key points of investment: The performance slightly exceeded Shen Wanhongyuan’s expectations. Monocrystalline wafers and module sales grew rapidly.Reporting information, the company’s operating income was 141.1.1 billion, an increase of 41 every year.09%; realized net profit attributable to mother 20.10 ‰, an increase of 53 per year.76%, performance growth is primarily due to the continued growth in sales of monocrystalline wafers and modules.Reporting on crystals, the company has realized the external sales of monocrystalline silicon wafers21.4.8 billion pieces, a year-on-year increase of 183%; the external sales of monocrystalline modules reached 3193MW, a year-on-year increase of 21%.26.The effect of scale drives profit growth, and the cost of blending non-silicon continues to fall, leading to the company’s gross profit margin.22%, an increase of 3 per year.6 numbers; cost rate of 8 during the realization period.66%, a reduction of 0 per year.28 units.The performance growth drove a significant improvement in cash flow, and the reporting company realized a net cash flow from operating activities.27 ppm, a 107-year increase.61%. Silicon wafer capacity expansion has accelerated, and non-silicon costs have continued to fall.As of the end of 2018, the company’s silicon wafer production capacity reached 28GW. In April this year, the company announced that it plans to reach 65GW by the end of 2021. According to the latest construction progress, the company is expected to complete its expansion plan one year in advance.Since 2018, the company has successively combined with OCI, Grand New Energy, Tongwei and Xinte Energy, etc. in the early stages.31 The highest-level raw material procurement agreement to ensure the supply of high-quality raw materials.The report decreased, and the company further reduced the non-silicon cost of the product through equipment modification, process improvement, and management improvement, among which the non-silicon cost of silicon wafers gradually decreased.75%.In June 2019, the company released a new M6 single crystal silicon wafer. The power of 72-type modules using M6 size silicon wafers can reach 420-430W, which further promotes the industry chain to reduce costs and increase efficiency. The overseas module market has developed smoothly, accelerating the development of efficient battery modules.According to the number of reports, the company’s overseas sales of monocrystalline modules were 2,423MW, an annual increase of 252%, accounting for 76% of the total external sales of monocrystalline modules, an increase of 43 shares compared with 2018.The report is significant, and the company’s R & D expansion is gradually7.8.1 billion, accounting for 5 of the revenue.53%.The company has developed the third generation PERC battery, which improves the conversion efficiency of single / double-sided 武汉夜生活网 batteries.More than 3%; In May of this year, the company released a new generation of high-efficiency single-crystal module products Hi-MO4. Hi-MO4 uses an upgraded PERC technology based on 6 main grids, combined with half-chip, double-sided module packaging technology, and the battery efficiency can reach 225%, the front power of the module can reach up to 430W.The company plans to produce monocrystalline cells by the end of 2021, with module capacity reaching 20GW and 30GW, respectively. The next two years will promote the accelerated launch of high-efficiency battery module capacity. Upgrade earnings forecast and maintain “overweight” rating.As a leading company in the field of solar monocrystalline silicon, the company is expected to continue to lead the industry.We raise the company’s profit forecast and expect to achieve net profit attributable to mothers in 19-2149.30, 61.39, 74.9.3 billion yuan (45 before the increase).56, 54.87, 66.7.5 billion), the corresponding EPS is 1.36, 1.69, 2.07 yuan / share, the current sustainable corresponding PE is 21, 17, 14 times, maintaining the “overweight” level. Risk warning: Global photovoltaic replenishment installations are less than expected; silicon wafers and module prices have fallen sharply.

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