Tongwei shares (600438) 2019 semi-annual report review: silicon material business gradually enters the Jiajing single crystal market or will pick up
Incident Description The company released its semi-annual report for 2019 and achieved operating income of 161 in the first half of the year.24 ppm, an increase of 29 in ten years.39%; net profit attributable to mother 14.51 ppm, an increase of 58 in ten years.01%. Investment Highlights Cell Business: The performance in the first half was outstanding. The market price in September-November attempted to rebound to Chengdu. Hefei had a total of 6.The production capacity of 4GW monocrystalline PERC cells reached production in the first quarter. Until the release of the Interim Report, the utilization rate of the new production line has exceeded 110%, and the capacity utilization rate continued to exceed 120% during the year.According to PV Infolink data, the average market price of monocrystalline PERC cells in January to June 2019 was at 1.16-1.At 30 yuan / W, it maintained a high level. In the first half of the year, the company’s monocrystalline PERC cell sheet gross margin was close to 30%, and the polycrystalline cell sheet gross margin exceeded 20%, both maintaining market-leading levels. In July, due to the release of domestic bidding project product demand, the overseas market entered the off-season and other factors, the battery chip prices were temporarily low.We expect that from September to October, the full release of domestic bidding projects and the overseas market will gradually enter the peak season. The battery chip market price is expected to gradually pick up. In the second half of the year, the company’s overall battery business will remain at about 20%. The company is currently constructing Phase 4 and Meishan Phase 1 high-efficiency crystalline silicon battery projects. It is expected to be completed and put into operation at the end of 2019 to the first half of 2020. By then, the company’s battery capacity will be further increased from 12GW to 20GW, and the profitability of the battery business will continue to increase. Preliminary business: Full release will be ushered in 合肥夜网 the second half of the year, and the dense material rate will continue to increase in the first half of the restructuring volume.2 baseline, the overall single crystal rate of 40%, mainly due to the new investment in Leshan, Baotou each increased throughput and climbing and quality improvement later than expected.According to the company’s semi-annual report, Baotou and Leshan’s new production capacity reached 100 tons / day in March and June respectively. The production cost has replaced 4 million tons / ton and the gross profit level of the new production capacity has reached 30%.In the second half of Leshan, the single crystal rate of Baotou’s new production capacity is expected to increase from 60% and 40% to 80-85% respectively. Considering that the current price of dense materials is higher than the price of cauliflower 武汉夜生活网 materials by more than 30%, the profitability of the company’s profitable business is expected to be significant.With the improvement, the gross profit margin of Leshan and Baotou’s new production capacity is expected to further approach 40%. Feed business: price reduction and volume increase, profitability has increased steadily. Affected by the swine fever in Africa, environmental protection requirements of farming and fluctuations in raw material prices caused by international trade disputes, the cost of feed companies has increased.The company adopted a sales strategy for profit-making customers, achieving a 17% increase in feed sales in the first half of the year, an annual increase in operating income of 14%, and a gross profit increase of approximately 10% each year.With the advent of the peak sales season in the second half of the year, related performance is expected to continue to improve. Profit forecast and estimation We expect that the company will achieve a net profit of 30% in 2019-2021.4.1 billion, 40.8 billion, 50.07 trillion, the EPS of the current share capital is 0.78 yuan, 1.05 yuan, 1.29 yuan, corresponding to 19.24 times, 14.34 times, 11.68 times P / E, continue to give “Buy” rating. Risks indicate that the market price of photovoltaic products has fallen or exceeded expectations; the company’s product segmentation volume has fallen short of expectations.

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