Tongwei shares (600438): the first half of the battery profit is in line with expectations

Tongwei shares (600438): the first half of the battery profit is in line with expectations
Event: The company announced its 2019 Interim Report and achieved revenue of 161.2.4 billion, an increase of 29.39%; net profit attributable to mother 14.51 trillion, with an increase of 58.01%; EPS 0.37 yuan, ROE 8.83%.Among them, 2Q19 achieved revenue of 99.55 trillion, with an increase of 37.51%; net profit attributable to mother 9.6 billion, an increase of 60.50%; EPS 0.25 yuan, ROE 5.91%, performance was in line with expectations. Battery performance increased by 192.72%, non-silicon costs are expected to fall further.In terms of production and sales, at the end of the reporting period, the company has formed a 12GW high-efficiency solar cell capacity, with a conversion volume of about 6GW in 1H19, an increase of about 97%, and the company’s production capacity and 重庆耍耍网 output continue to remain the first in the industry.In terms of profitability, Tongwei Solar achieved net profit in 1H19.7.7 billion, an increase of 192.72%, 1H19 single watt net profit is about 0.16 yuan / W, an increase of about 49% over the same period last year.In terms of cost, the company newly built and commissioned Chengdu and Hefei6.The 4GW production capacity achieved 100% capacity utilization rate only after 3 months of production commissioning, which has now exceeded 110%. It is expected that the capacity utilization rate will exceed 120% during the year. At the same time, Chengdu Phase IV and Meishan IPhase high-efficiency crystalline silicon battery projects have been completed and put into production one by one. By then, the company’s cell production capacity will reach 20GW, and the scale effect will be obvious. Non-silicon costs may be further reduced. Break through the contradiction to maintain profit, single crystal materials accounted for 80% -85% of the year.In terms of production and sales, at the end of the reporting period, the company had formed a high-purity crystalline silicon production capacity of 8, and 1H19 Yongxiang achieved high-purity crystalline silicon sales2.28 years, with an annual increase of 162.85%.In terms of profitability, with the market price falling by 40% -50% compared to the same period last year, the gross profit margin was 16.98%, reflecting the company’s core competitiveness in the field of high-purity crystalline silicon.In terms of cost, most of the main consumption indicators of Baotou and Leshan’s new production capacity exceeded design expectations, and production costs met the established target of less than 4 million tons / ton.In terms of the proportion of single crystal materials, the proportion of single crystal materials in the initialization 2 insertion project has exceeded 80%. The conversion of Baotou and Leshan’s new projects has improved the quality and efficiency, and the technology of the replacement project is perfect.The proportion of crystal material can reach 80% -85%. Investment suggestion: Domestic demand is obviously turning point at the end of the third quarter. At the same time, the peak season for overseas demand is coming, and battery prices are expected to bottom out. At the same time, the supply and demand of monocrystalline silicon materials continue to be tight.We expect to achieve net profit 31 in 2019-2021.17, 40.61 and 47.6.6 billion, an increase of 54 each year.40%, 30.28%, 17.36%, current sustainable corresponding PE for three years is 16, 12, 10 times, maintain “Buy” rating. Risk reminder: the risk of market fluctuations brought by the acceleration of decompletion; the risk of technological updates.

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