Tongwei Shares (600438)-Photovoltaic Manufacturing Shows True Colors

Tongwei Shares (600438)-Photovoltaic Manufacturing Shows True Colors
Demand: Parity will accelerate, and demand may reach 151 in 2020.6GW, the same increase of 32.5%.In 2018, the average global photovoltaic construction cost was 1210 USD / kW, a 13% decrease, and the global LCOE average was 0.085 USD / kWh, which is already lower than the industrial electricity prices and residential electricity prices of 27 European countries. The parity area has expanded, and the global GW-level market has increased significantly. In 2007, the first GW-level market began to appear in the world.Broad development space.Looking forward to 2020, considering the deferred bidding projects in China in 2019 and the expansion of overseas parity areas, global PV demand is expected to reach 151 in 2020.6GW, the same increase of 32.5%. Preliminary: The single crystal material supply is tightly balanced, and the company has the first-mover advantage.The initial transformation is a technology- and capital-intensive industry with a first-mover advantage, which will lead to an oligopoly pattern in industry integration and competition.The company is one of the first domestic engineers to research and produce 北京夜网 solar-grade temporary technology. It is also one of the few domestic silicon suppliers that can meet the requirements for efficient monocrystalline silicon wafer production. The cost advantage brought by the leading technology is the company’s silicon replacement.Core competitiveness, the company’s Baotou and Leshan new project production costs have replaced less than 40 yuan / kg, lower than the industry average of 60 yuan / kg.In the long run, the company’s production capacity expands, the proportion of single crystal materials increases, and it brings obvious advantages in the sector.In the short term, it is expected that the expansion of production will shrink by 2020, and the margin of supply and demand will improve. Batteries: The bottom of the industry’s profitability, and its cost competitive advantage is prominent.Battery tandem is an industry with fast technology iterations and heavy assets. Financial prudence and lean management companies win.The company’s core competitiveness lies in maintaining extremely high production capacity improvement, yield, and cost control through lean management.In 2018, the company’s polycrystalline battery and single crystal battery capacity utilization rates remained above 100%, and the yield rate reached 99%.the above.On this basis, the company’s expansion of production capacity has helped the battery segment to continue to grow. At the same time, research and development has continued to expand, laying out the potential technical direction of the battery, and consolidating the position of the battery access leader.In the short term, the current monocrystalline PERC battery price corresponds to about 10% of the gross profit margin of first-tier companies. It can basically be judged that the current price is in the bottom of the industry, which can help suppress it. At the same time, the production of silicon wafers will gradually expand next year, or it will lead to price declines and profitabilityOr will pick up. Investment suggestion: Some domestic bidding demand in 2019 will be deferred until next year’s release, and combined overseas demand will be strong. It is expected that global demand will increase by 32 in 2020.5%, the battery chip price is expected to bottom out, while the supply and demand of single-crystal silicon materials continue to tighten.We expect to achieve net profit27 respectively in 2019-2021.09, 40.52 and 47.5.6 billion, an increase of 34 each year.19%, 49.58%, 17.38%, the current corresponding three-year PE is 17, 11, and 10 times respectively, maintaining the “Buy” rating. Risk reminder: the risk of market fluctuations brought by the acceleration of decompletion; the risk of technological updates.