Tongwei (600438): Silicon material, the bottom profit of the battery chip can be expected in the future

Tongwei (600438): Silicon material, the bottom profit of the battery chip can be expected in the future
Recommended logic: The photovoltaic industry is gradually moving towards parity. As a leader in silicon materials and cells, the company will fully benefit from the industry’s shift from cycle to growth; the company will continue to expand its production in 2020.6-inch, 10GW battery chip, further increasing the concentration of the industry; At present, silicon materials and battery chips are at the bottom of profitability, and there is great flexibility in upward repair. Rapid expansion of production to create a dual leader of silicon materials and cells: Since the company’s in-depth layout of the photovoltaic industry in 2016, its revenue and net profit have been in a steady growth trend, forming a dual-main industry development pattern of “photovoltaics” and “agriculture”.The company has been in a period of rapid expansion in recent years, expanding the production of silicon materials and battery cells. The vertical capital expansion in 2018 was 71.2 ppm, an increase of 773 over 2016.6%, the rapid deployment of production capacity has expanded the company’s foundation to become a silicon material + battery chip double penetration leader. Parity opens up the growth attribute: In the past, due to the supplementary existence of the photovoltaic industry, there were two characteristics of “cash flow difference” and “large cyclical variability”. These are the two big mountains of photovoltaic industry growth and valuation.After dating the bidding mechanism in 2019, the average bidding price of the first, second, and third type of resource regions decreased by 0 compared to the benchmark power price in 2018.22 yuan / kwh, 0.28 yuan / kwh, 0.29 yuan / kwh, the average compensation ratio has been repeated 20.2%, 10.2%, 16.3%.At the same time, 2019 is the first year of domestic “photovoltaic parity”, with a total of 14 reported.79GW parity photovoltaic project.The advent of the parity era will effectively improve two major factors. Silicon materials and battery cells are in the bottom range, and the upward repair flexibility is great: the price of silicon materials has been declining all the way from the end of 2017, and has plummeted from a high to 50% to 6.5?7.At the level of about 4 million / ton, the “old capacity” 苏州桑拿网 that has been expanded before 2017 is basically in transition. At present, the leading companies in battery chips have a gross profit margin of about 10%, and most of them are in a state of substitution.As a manufacturing product with a relatively low depreciation ratio, the state of the entire industry is difficult to continue. Overlapping demand in the fourth quarter is gradually picking up. At present, prices have entered the repair stage and profits will gradually rise. The capacity of silicon materials and battery cells is rapidly expanding, and the scale advantage is obvious: the company’s silicon materials have now formed 8 production capacities, and the battery cells have formed 20GW production capacity, ranking the second and first in the world respectively.The company will continue to expand production in 2020.In 杭州夜生活网 6 seconds, the battery chip is 10GW, which further enhances the industry concentration and consolidates the company’s scale advantage in silicon materials and solar cell replacement.The gradual release of new production capacity of silicon materials and cells will significantly reduce the average production cost in 2020 and help the company’s performance growth. Earnings forecast and investment advice: Expected company 2019?In 2021, the EPS will be 0.72, 0.90, 1.17 yuan, the corresponding PE is 16X, 13X and 10X, which are lower than the average estimated level of the photovoltaic sector, given 18X conversion in 2020, corresponding to the target price of 16.2 yuan, maintain “Buy” rating. Risk warning: overseas photovoltaic market may be less than expected risk, cell expansion or may be less than expected risk.