Longji (601012): Operating cash flow improved significantly, high growth momentum promoted sustainability

Longji (601012): Operating cash flow improved significantly, high growth momentum promoted sustainability
Event: Longji shares released the semi-annual report for 2019, reporting that the combined company achieved revenue of 141.110 thousand yuan (+41 compared with the same period last year).09%); net profit attributable to mother 20.100,000 yuan (+53 compared with the same period last year).76%); basic profit income is 0.57 yuan / share (yoy + 50%); net cash flow from operating activities reached 24.2.7 billion (+107 compared to the same period last year).63%).Among them, 19Q2 revenue was 84.10,000 yuan, an increase of 28 in ten years.61%, an increase of 47 from the previous month.13%, realizing net profit attributable to mother 13.98 ppm, an increase of 82 in ten years.98%, an increase of 128 from the previous month.81%. The increase in sales of non-silicon wafers and the increase in bi-directional module penetration have led to significant growth in the first half of the year: As the internal bidding project was officially launched in early July, domestic photovoltaic installations in the first half of the year were only 11.4GW, an average annual increase of about 53%, but driven by the rapid demand in overseas markets, the global new installed capacity of about 47GW, achieving stable growth, the single crystal market share has further increased to 武汉夜生活网 about 60%.The company’s average sales volume of silicon wafers and modules increased the most, and the non-silicon cost of silicon wafers continued to increase (yoy-31.75%) and the increase in the penetration rate of double-sided components (from 22% in Q1 to 32% in Q2) drove the company’s profitability significantly.Specifically: 1) In the first half of the year, monocrystalline silicon wafers replaced 29.4.3 billion pieces, of which 21 were exported.4.8 billion tablets, an increase of 183% in ten years; revenue 58.25 trillion, gross profit margin 23.21%, expected to contribute 8-9 trillion net profits; of which, Q1 exports 9.8.2 billion tablets, with a gross margin of 21.51% in the second quarter was 11.6.6 billion tablets with a gross margin of 24.57%, gross profit margin improved significantly.2) Component costs in the first 南京桑拿网 half of the year3.2GW, an annual increase of 21%, of which overseas sales2.42GW, a year-on-year increase of 252%; revenue 64.83 trillion, gross margin 28.42%, expected to contribute net profit of 9 billion to 1 billion; of which, Q1 exports 1.24GW, gross margin 25.01%, Q2 exports 1.96GW, gross profit margin 30.39%, gross profit margin improved significantly.3) Revenue from power generation in the first half of the year 3.76 trillion, expected to contribute 0 net profit.6-0.800 million.4) In the first half of the year, 107MW of power plants were transferred, contributing 0 to investment income.9.5 billion. The operating efficiency has been significantly improved, the operating cash flow has improved significantly, and the growth trend of advance receipts: in the first half of the year, the company continued to carry out the management activities of “enabling, empowering, and energizing”., Organizational efficiency and operation quality have been significantly improved.In 19Q2, the inventory turnover days decreased by 18 days month on month, and the accounts receivable turnover days decreased by 19 days month on month. At the same time, due to the increase in sales receivables, the net cash flow from operating activities in the first half of the year reached 24.27 ppm, an increase of 107 a decade ago.63%.In addition, according to forward-looking indicators such as advance accounts, advance accounts at the end of the second quarter amounted to 32.7.9 billion yuan, of which 16 increased in the second quarter.2.0 billion, an increase of 124% from the previous month, reflecting the current good order situation.Looking into the second half of the year, domestic and overseas market launches will simultaneously enter the peak demand season in September. It is expected that the demand for modules in the second half of the year will reach 70GW, which is a 60% increase from the previous month.The company’s current module orders are sufficient, and the supply of single crystal silicon wafers is tight, and the price is expected to be relatively firm. At the same time, non-silicon costs will further decline, and the company’s performance is expected to continue its high growth momentum. Increase investment in research and development, accelerate the expansion of production capacity, and ensure long-term leadership.The report continues that the company continues to maintain high-intensity R & D investment, with R & D investment reaching 7.8.1 billion, with a revenue share of 5.53%.  Continuous high-intensity research and development investment brings the company’s comprehensive leadership in technology and cost.In the first half of 2019, the company’s average silicon wafer non-silicon cost had previously fallen by 31.75%. Perc battery and module conversion efficiency has repeatedly exceeded the world record. At the same time, the company also introduced efficient, highly reliable, and cost-effective M6 silicon wafers and Hi-Mo4 modules, leading the industry’s continuous decline in electricity costs and promoting the industry’s parity on-line Internet access.process.In terms of capacity, according to the latest announced capacity expansion plan, from 2019 to 2021, wafer capacity will reach 36/50 / 65GW, cell capacity will reach 10/15 / 20GW, and module capacity will reach 16/25 / 30GW, respectively.According to the current construction progress, silicon wafer production capacity is expected to reach 65GW by the end of 2020, one year earlier than originally planned.At present, the second phase of Yunnan’s single crystal silicon rod (6GW) and silicon wafer project (10GW) are accelerating. It is expected to start production in 19Q4, and the company’s capacity scale advantage and leading position will be further consolidated. Investment advice: We expect the company’s revenue from 2019 to 2021 to be 348 trillion, 556 trillion, and 698 trillion, and its net profit to be 51 trillion, 62 trillion, and 73 trillion, respectively. Maintain the investment rating of Buy-A with a target price of 34.08 yuan. Risk warning: PV installed capacity exceeds expectations, capacity expansion progress exceeds expectations, etc.

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