Tongwei (600438): Leader accelerates expansion and continues to advance energy revolution

Tongwei (600438): Leader accelerates expansion and continues to advance energy revolution
Parity opens a wide market space, 都市夜网 leading the ability to accelerate the expansion of advantages. Tongwei is a leading company in high-purity crystalline silicon and solar cells. Its size, quality, cost, and efficiency are globally leading. According to the company ‘s announcement on February 11, it currently has 8 high-purity crystalline silicon.20GW high-efficiency solar cell capacity.In order to further consolidate and strengthen the company’s core competitiveness in the industrial chain, combined with comprehensive advantages in technology, cost, management, etc., the company formulated a gradual development plan for high-purity crystalline silicon and battery chips, with the goal of forming a gradual expansion of production capacity by 22-29 by 2023.The cumulative capacity of the cell is 80-100GW.We are optimistic about the company’s continued leading advantage in silicon materials and battery swaps. A rebound in silicon material prices will drive profitability. We expect EPS to be zero in 19-21.78/1.10/1.39 yuan, given a target price of 19.80-22.00 yuan, maintain “Buy” rating. The cost of silicon materials is in a leading position, and the expansion of production to accelerate import substitution companies is currently leading the cost advantage of high-purity crystalline silicon, and the proportion of single crystal materials has exceeded 85%.According to the production expansion announcement, the company plans to accumulate production capacity by the end of 2021.5-15 end, 2022 end 15-22 end, 2023 end 22-29 end.Production costs are controlled at 3-4 million tons / ton, and cash costs are controlled at 2-3 million tons / ton.N-type materials will be launched in time according to market demand. In the future, N-type materials will account for 40-80%.In the short term, after the holiday, the price of silicon materials will increase sharply. The upstream raw material silicon powder will be affected by post-holiday rework and logistics. Some companies may face impact and the operating rate will be reduced. According to Bloomberg, OCI production reduction will reduce more short-term supplements. We believe thatThe price increase of silicon materials is certainly continuous. Newly build 30GW battery and supporting projects, and continue to expand the scale of advantage. The company plans to invest in 30GW battery lines in Chengdu Jintang. The total project investment is expected to be about 20 billion yuan.The project will be implemented in four phases, one of which is 7.The 5GW project will be launched before March 2020, and will be completed and put into operation in 2021. The follow-up projects will be gradually completed and put into operation in the next 3-5 years according to market demand.In terms of non-silicon costs, Perc products are zero.Below 18 yuan / w, non-silicon costs of new technology products continue to fall.The company has deep technology accumulation in the field of battery chips. New projects will continue to optimize the production process. Large size, high-efficiency products such as Perc +, Topcon and HJT will continue to reduce the non-silicon cost of batteries.We believe that the continuous advancement of battery technology will further strengthen the company’s direct lead through continuous research and development and moderate industrialization. Shuanglong’s expansion of production enhances core competitiveness and maintains a “buy” rating. The company is a double leader in the field of silicon materials and battery chips. Its scale, quality, cost and efficiency are leading in the world.We are optimistic about the rise of domestic demand and the steady growth of overseas markets.The new production capacity will further consolidate the company’s temporary advantages in silicon materials and cells. We adjust the EPS in 19-21 to 0.78/1.10/1.39 yuan (previous average 0.78/1.07/1.35 yuan), the average PE of the comparable company for 20 years is expected to be 18.52 times, based on the company’s silicon material, the double-faucet position of the cell chip and the performance flexibility brought about by the launch of new production capacity, giving the company 18-20 times PE for 20 years and a target price of 19.80-22.00 yuan, maintain “Buy” rating. Risk warning: the expansion progress exceeds expectations; the photovoltaic installation growth rate exceeds expectations; the fierce competition in the industry exceeds expectations.