The industry's prosperity has rebounded, and the leading photovoltaic stocks have hit new highs one after another
On April 18, the stock prices of two leading photovoltaic listed companies in A-shares both hit record highs. Longi Green Energy Technology Co., Ltd. has a high of 24.89 yuan/share, closing up 3.93%, at 24.32 yuan/share; Tongwei Technology Co., Ltd. has a high of 14.85 yuan/share, closing up 3.4%, at 14.3 yuan/share.
reporter noticed that Tongwei Co., Ltd. recently lowered the price of PERC batteries, which is regarded as a trend, and photovoltaic price reduction has become a major trend. On the one hand, prices are reduced, while on the other hand, photovoltaic leaders are investing in expansion. In the interview, industry insiders generally believe that the demand for photovoltaics in overseas markets is increasing significantly, and with the price drop, the competitiveness of photovoltaics compared with thermal power will also appear.
Photovoltaic leader expansion of production
High performance growth
Photovoltaic industry is facing price cuts, which makes the market have certain concerns about the profitability of photovoltaic companies, but the actions of leading companies to expand production are also very eye-catching.
Longi Green Energy Technology Co., Ltd. announced on April 17 that the company has reached cooperation intentions with Yinchuan City on investing in the construction of 15GW single crystal silicon rods and silicon wafers projects and 3GW single crystal battery projects. The former has an investment of about 4.3 billion yuan and is planned to be put into production gradually in the second half of 2020; the latter has an investment of about 1.55 billion yuan and is planned to be put into production gradually in the first half of 2020.
In addition, Longi Green Energy Technology Co., Ltd. recently completed a share issuance of 3.9 billion yuan. According to the plan, this financing will also be used for capacity expansion, including the Ningxia Leye annual production of 5GW high-efficiency single crystal battery project and the Chuzhou Leye annual production of 5GW high-efficiency single crystal module project.
Tongwei Co., Ltd.'s production expansion action is also huge. Last month, the company's application for issuing convertible bonds was approved by the China Securities Regulatory Commission. The company plans to raise 5 billion yuan by issuing convertible bonds, of which 2.65 billion yuan will be invested in the 25,000-ton high-purity crystalline silicon project in Baotou and 2.35 billion yuan will be invested in the 25,000-ton high-purity crystalline silicon project in Leshan.
In addition to the two A-share leaders, Trina Solar signed a contract with Yiwu city on April 16 and will build a high-efficiency solar cell module production base in Yiwu Information Optoelectronics High-tech Zone to build a solar cell module production, manufacturing and sales base with important influence in the international arena, advanced technology and high-end products. However, Trina Solar has not disclosed indicator information such as investment amount and design capacity.
After the new policy of 531 last year, uncertainty in the photovoltaic industry increased, and the A-share photovoltaic sector ushered in a sharp decline. However, since the fourth quarter of last year, the photovoltaic sector has seen a round of rise. After the stock prices of the two leading companies hit new highs, market insiders expressed optimism to the "second round of rise" of photovoltaics. It is still difficult to determine whether the photovoltaic sector can usher in a new round of rises, but from the perspective of performance, the photovoltaic sector has strong growth, which has provided certain support for the stock price. Data from BOCI shows that the photovoltaic sector is marginally improving, with profits expected to reach 1.116 billion yuan to 1.391 billion yuan in the first quarter of 2019, an increase of 23.4% to 53.84% year-on-year.
When photovoltaic companies have high performance growth, there is also differentiation in the sector, and the high growth in the industry is mainly driven by some leading companies. Among them, Tongwei Co., Ltd.'s net profit in the first quarter of this year was 490 million yuan, a year-on-year increase of 53.36%. It is worth mentioning that Tongwei Co., Ltd.'s high growth is closely related to the further release of the company's battery cell production capacity. The company's annual production capacity has reached 12GW, and the shipments in the first quarter exceeded 2.4GW. In addition, Zhonghuan Co., Ltd.'s net profit is expected to increase by 44.03%-76.04% in the first quarter of this year, and Oriental Risheng's net profit is also expected to increase significantly. There are of course exceptions to
. Sungrow Power expects net profit to drop by 11%-26% year-on-year. The main reason is that the new photovoltaic policy has not been implemented during the reporting period, and the number of new photovoltaic grid connections has dropped significantly year-on-year.
Full market demand
Party Internet access is approaching
"At present, the prosperity of the photovoltaic industry has recovered, and the expansion of production by leading enterprises must be due to the feedback of market demand to product supply. If the supply is still in a state of oversupply, it is impossible for leading enterprises to put into production and expand production simultaneously." An industry insider told reporters.
The person further stated that the current increase in demand in the photovoltaic market mainly comes from overseas, especially in some emerging markets, and the double countermeasures for exported photovoltaics have also been cancelled; back to China, the photovoltaic industry has ushered in some favorable policies since the beginning of the year, allowing everyone to see positive signals, but some policies are not clear enough and need to be further implemented.
India is a typical example of the rising overseas photovoltaic market. It is understood that Indian Prime Minister Modi has actively promoted the development of photovoltaics since taking office, and India has now become one of the top three photovoltaic markets in the world. Data at the end of September last year showed that India's cumulative photovoltaic installations have reached 24GW, with a cumulative increase of 6.97GW in the first three quarters. Compared with the same period in 2017, the installation volume growth rate reached 21%.
China Electric Power Unit data also confirms the strength of overseas markets. From January to February this year, domestic photovoltaics added 3.49GW of grid connection, a year-on-year decrease of 68%. The main reason for the sharp decline in new installed capacity is that the base was relatively high in the same period in 2018, and the impact of the "531" new policy continued. The uncertain domestic policy has affected the release of demand, but the overseas market is in a high state of prosperity. Photovoltaic module exports from January to February 2019 were 8.61GW, a year-on-year increase of 63%.
Shenwan Hongyuan Hong Kong also gave a considerable annual demand to be tested. It is expected that the total installed capacity of the global photovoltaic power generation will exceed 120GW in 2019, an increase of about 20% year-on-year.
"If the cost of photovoltaic power generation in the future can be lower than thermal power, imagine how much space will be in the future." A market participant told reporters. In January this year, the National Development and Reform Commission and other departments issued policy guidelines for photovoltaic power generation to access the Internet with parity. The date of access to the Internet with parity is approaching, and the market is also looking forward to it.
4 In April, National Energy Administration once again issued a policy document to promote photovoltaic grid parity, encouraging onshore wind power and photovoltaic power generation projects that have been approved (recorded) or configured in 2018 or previous years to voluntarily convert to parity grid parity projects. Judging from the issuance of relevant documents, 2019 will be a critical year for the photovoltaic industry to transform into a parity grid access model.
Cinda Securities believes that with the introduction of policies and project application in the second quarter of this year, the construction of photovoltaic project will accelerate in the third quarter, the demand on the manufacturing side will rebound significantly, and the industry turning point is approaching; at the same time, due to the global photovoltaic parity resonance, the manufacturing side leaders will usher in huge growth space.
Longi Green Energy Technology Co., Ltd.: Single crystal silicon wafer price rises, production capacity expansion is steadily advancing
Longi Green Energy Technology Co., Ltd. 601012
Research Institution: Zhongtai Securities Analyst: Zou Lingling Writing date: 2019-02-25
Event: (1) On February 22, Longi adjusted the price of single crystal silicon wafers, with the price of single chips rising by 0.1 yuan to 3.15 yuan per piece, an increase of 3.28%; (2) Received the approval document for share allocation; (3) Invest in the construction of Kuching's annual production of 1GW single crystal battery project, with a total investment of about 840 million yuan; (4) Invest in the construction of the second phase of Baoshan annual production of 6GW single crystal silicon rods, the second phase of 6GW single crystal silicon rods, and the second phase of Chuxiong's annual production of 10GW single crystal silicon wafers, with an investment of about 1.749, 1.937, and 1.486 billion yuan, respectively.
The off-season in the first quarter was not slow, and the price of monocrystalline silicon wafers rose. Affected by overseas demand and domestic leaders and distributed projects, the off-season in the first quarter of 2019 was not slow, and the strong downstream demand was transmitted to the upstream. Following the rise in prices of GCL and Zhonghuan silicon wafers, Longi also adjusted the price of monocrystalline silicon wafers on February 22, with the price of monocrystalline silicon wafers rising by 0.1 yuan to 3.15 yuan per chip, an increase of 3.28%.
Social Opinion Management Measures for Photovoltaic Power Generation in 2019, domestic demand certainty increases in 2019, and the installation peak season is expected in the third and fourth quarters, and the prices of the industrial chain may rise seasonally. The February 18th edition of the draft for soliciting opinions has added certainty of domestic photovoltaic demand in 2019. Combined with the strong overseas demand, we expect global demand in 2019 to be 115-125GW, higher than the 109GW demand in 2018 (BNEF data). Due to the implementation of policies and implementation in 2019, domestic demand may be concentrated in the third and fourth quarters. Coupled with the relative rigidity of the supply side caused by the reshuffle of the 531 new policy, the industry's operating rate and prices in some links will increase, and the company is expected to benefit from the excess returns brought by price increases.
share allocation has been approved to ensure the implementation of battery module production capacity. At the same time, overseas battery and silicon wafer projects have begun to invest and build to ensure the steady expansion of the company's production capacity.After the approval of the share allocation application, the smooth implementation of Ningxia Leye's annual production of 5GW high-efficiency single crystal cells and Chuzhou Leye's annual production of 5GW high-efficiency single crystal modules can be ensured. At the same time, the Kuching annual production of 1GW single crystal cell project, the Baoshan annual production of 6GW single crystal silicon rod phase II project, the Lijiang annual production of 6GW single crystal silicon rod phase II project, and the Chuxiong annual production of 10GW single crystal silicon wafer phase II project have begun investment and construction, ensuring that the company's planned production capacity of monocrystalline silicon wafers by 2020 will reach 45GW. At the same time, the industrial chain layout has been improved and the company's strategic position as a leading global provider of high-efficiency single crystal solution.
Investment advice: Due to the rise in silicon wafer prices and the possible price increase in the installation peak season in the third and fourth quarters, we expect to achieve net profits of 2.683, 4.026 and 4.986 billion yuan from 2018 to 2020, respectively, which will change year-on-year -24.73%, 50.06%, and 23.85%, respectively. The current stock price corresponds to three-year PEs of 30, 20, and 16 times, and maintain the "buy" rating.
Risk warning: Photovoltaic policies and installed capacity releases are lower than expected, and overseas demand is lower than expected.
Tongwei Co., Ltd.: silicon material + battery double material leader, cost reduction and volume increase, future market prospects
Tongwei Co., Ltd. 600438
Research institution: Dongwu Securities Analyst: Zeng Duohong, Cao Yue Written date: 2019-02-20
Global parity, stars and seas; dual industries are carried out at the same time, and the accumulation is profound: in early November, domestic photovoltaic policy reversed, and in January parity management measures were introduced to comprehensively promote parity, and some subsidy projects ensure a smooth transition of parity, and the domestic market gradually enters comprehensive parity next year and after; the decline in industrial chain prices after 531 brought about an elastic release of overseas demand, coupled with the improvement of overseas photovoltaic policies, the new demand in the United States, Europe, Japan, India and other countries exceeded expectations. It is expected that the domestic market demand in 2019 and 20 years will be 47 and 60GW, overseas demand will be 80+ and 90+GW, and the global market demand will be 120+ and 150+GW. Tongwei has two main businesses, agriculture and new energy. Its subsidiary Yongxiang Co., Ltd. has accumulated ten years of photovoltaics. The battery cell business started to scale from Saiwei Hefei factory in 2015, and has now formed a dual leader in silicon material + high-efficiency battery.
polysilicon pattern has entered the knockout round, Yongxiang has led the lead in speeding up and pointed at the leader in silicon materials: Silicon materials have been launched in 18Q4, domestic substitution for foreign countries and low electricity price areas to replace high electricity price areas, and market knockout round has begun. In terms of production capacity, the subsidiary Yongxiang Co., Ltd. had a silicon material production capacity of about 20,000 tons at the end of 2017. In October and December 2018, the Baotou Phase I and Leshan Phase I were each put into production at 25,000 tons/year (the actual capacity was 30,000 tons/year). The actual capacity in the first quarter of this year reached 80,000 tons/year, and the long-term capacity is expected to reach 140,000 tons/year. In terms of cost, the company improves resource and energy utilization efficiency through the "polysilicon + chemical model" and reduces costs and increases efficiency through technical transformation. The average production cost in 2017 is 58,800 yuan/ton, and 55,000 yuan/ton in 2018. There is room for new production capacity to decline significantly compared with the old production capacity of electricity prices and energy consumption. The production cost will be reduced to less than 40,000 yuan/ton, and the cash cost will be reduced to less than 30,000 yuan/ton, leading the world. This year, the estimated output is 70,000-80,000 tons, 250% year-on-year, establishing the company's leading position in the world and significantly increasing its performance.
The road to high efficiency begins with PERC; Tongwei is leading the industry, and TSMC, the photovoltaic industry: single crystal PERC batteries have fast efficiency improvement, large space, and are easy to mass production. The demand for leaders and overseas is rising, and the price rebounds by 15% to 1.3 yuan/W. The company's cell production capacity of the Hefei and Chengdu bases is 3GW respectively. After 3.2GW in Chengdu in 2018 and 3GW in Hefei in early 2019, a total of 12GW cell production capacity will be formed, of which PERC is about 9GW, and 8GW single crystal PERC will be added in 2019, with a long-term plan of 30GW. The company's single and polycrystalline non-silicon costs are stable at 0.2-0.25 yuan/W, and the conversion efficiency of PERC batteries reaches more than 22%, which is significantly ahead of the industry and continues to promote cost reduction and efficiency improvement. The battery production this year is expected to be 12GW, 100% year-on-year. PERC has exceeded expectations and has a high premium this year, and its profits are expected to exceed expectations.
The agricultural and animal husbandry sector has made steady progress, and the integrated fishing and light industry is synergistic: the company is a leading enterprise in the aquatic feed industry, with a market share of 12%-15%. Driven by R&D, agricultural and animal husbandry business has made steady progress, and volume and profits have increased. The company takes advantage of the advantages of fishery resources to create a new model of "fishing and light integration" photovoltaic power generation, forming a coordinated relationship between the dual main business industries. As of 2018H, the cumulative installed capacity of the power station exceeded 848MW. With the arrival of the era of photovoltaic parity, the company will also make efforts in this area and is expected to become a stable performance support in the future.
profit forecast and investment rating: We expect the company's net profit attributable to shareholders in 2018-20 will be RMB 2.070/3.166/3.98 billion, respectively, an increase of 2.9/52.9/25.7% year-on-year, corresponding to PE 23/15/12. The company will build a global leader in silicon material + PERC batteries, with production costs in the first echelon, and have a long-term advantage in the competition. It will give a target price of RMB 14.8, corresponding to 18 times PE in 2019, and a "buy" rating.
Risk warning: Policies do not meet expectations, competition intensifies, etc.
Gree Electric Appliances: 200 billion yuan of revenue has been successfully concluded, performance has been stored for winter
Gree Electric Appliances 000651
Research Institution: Shenwan Hongyuan Analyst: Zhou Haichen, Liu Zheng Date of Writing: 2019-01-18
200 billion yuan of revenue has been successfully concluded. Gree Electric Appliances released its 2018 performance forecast, with annual revenue of 200 billion to 201 billion yuan, a year-on-year increase of 33%-34%, and net profit attributable to shareholders of 26 billion to 27 billion yuan, an expected year-on-year increase of 16%-21%, corresponding to earnings per share of 4.32 yuan per share. Among them, the fourth quarter revenue was RMB 51.3-52.3 billion, an increase of 37%-40% year-on-year, and the net profit attributable to shareholders was RMB 4.9-5.9 billion, a decrease of 14%-29% year-on-year. At the same time, the extraordinary general meeting of shareholders completed the election, and Dong Mingzhu was re-elected as chairman.
air conditioning business is progressing rapidly, and the short-term highlights are moving towards multiple categories. 1) From the perspective of business split, air conditioners continue to contribute to the main growth, with revenue expected to increase by about 35% year-on-year. Considering that the industry online data mainly calculates the production and sales of downstream whole machine factories through the upstream compressor and component companies, it fails to reflect the changes in the actual sales and channel pressure data of the company, and the company's actual shipment growth is expected to be higher than the sales growth from January to November statistics by Industry Online. We expect sales and average price increase to contribute 20% and 15% respectively. 2) How to view the inventory pressure in the air conditioning industry? According to industry online statistics, as of the end of November, the inventory of the air-adjusted industry was 41.9 million units, a decrease of 700,000 units for the first time on the month-on-month. Among them, the factory inventory was 9.25 million units slightly increased, mainly due to the Spring Festival inventory at the end of the year + foreign trade export orders to grab orders, and the channel inventory was 32.65 million units, a decrease of 1.1 million units month-on-month, indicating that the industry as a whole is starting a destocking cycle. Judging from Gree's own performance, the retail growth rate since the fourth quarter has been higher than the growth of domestic sales shipments, which may indicate to a certain extent that the inventory pressure has slowed down. 3) Looking ahead to 2019, we continue our previous judgment that after the industry has experienced two consecutive years of channel inventory replenishment cycle, terminal sales and real estate pull, it may usher in moderation in 2019. However, the concentration of leading markets has increased and household appliances (small appliances, refrigerators and washing machines) has continued to make efforts after acquiring Jinghong. Even without considering the stimulus of potential home appliance policies, it is expected to maintain a revenue growth of 0%-5%.
Board of Directors’ change of leadership is implemented, and performance is stored for winter. 1) Corporate governance uncertainty has been eliminated. Dong Mingzhu was successfully re-elected during the board of directors, starting the third term of chairman, which to some extent eliminated the uncertainty of corporate governance. The company promised to maintain an annual performance growth of 10% in the future. We believe that it will help alleviate the market's medium- and long-term profit growth concerns. 2) If you have food in your hands, you are not panicked. According to the company's performance forecast, the annual net profit margin attributable to shareholders is about 13%, and is expected to decline by 1.9 pcts year-on-year. We judge that the main reason is that sales expenses are large in the fourth quarter, which to a certain extent leaves room for maneuver for the growth of net profit in 2019.
lowered its profit forecast and maintained its buy investment rating. As of the third quarter report, the company's cash assets (monetary funds + other current assets + notes receivable) were 170.5 billion yuan, and the family was well-off. Considering that domestic commercial housing sales continue to be sluggish, and the sales pressure of air conditioners will be high next year and next year, we lowered our net profit in 2018 to 2018 to 26.1 billion, 28.8 billion and 31.8 billion (original values were 29 billion, 32.2 billion and 35.7 billion), an increase of 16.3%, 10.4% and 10.6% year-on-year respectively, corresponding to EPS of 4.33 yuan, 4.78 yuan and 5.29 yuan (previous values were 4.82 yuan, 5.29 yuan and 5.81 yuan), corresponding to dynamic price-to-earnings ratios of 9 times, 8 times and 7 times respectively, with a high implied dividend yield, and maintaining the "buy" investment rating.
Pingmei Coal Co., Ltd. : The leader in coking coal in the central and southern region, intends to repurchase 270-330 million shares
Pingmei Co., Ltd. 601666
Research institution: GF Securities Analysts: Shen Tao, An Peng Date of Writing: 2019-03-13
intends to repurchase 270-330 million shares, demonstrating confidence
According to the company's announcement on March 8, the company plans to repurchase the company's shares, of which 50% of the repurchase shares are used for cancellation to reduce registered capital, and 50% will be reduced in accordance with the new repurchase regulations.The total amount of repurchase is 270 million to 330 million yuan, and the repurchase price does not exceed 5.41 yuan per share. If calculated based on the upper limit of the repurchase price, the number of repurchased shares is 49.91 million to 61 million shares, accounting for 2.1% to 2.6% of the company's current total share capital. This repurchase has been reviewed by the board of directors and still needs to be reviewed by the general meeting of shareholders. Repurchase demonstrates management's confidence in the company's future development prospects.
intends to issue bonds, adjust capital structure, and reduce financial costs
intends to issue renewable corporate bonds publicly: the total issuance scale shall not exceed 2 billion yuan, and the basic term shall not exceed 5 years (including 5 years). At the end of the agreed basic term period and the end of each renewal period, the company has the right to exercise the renewal option. The plan to issue perpetual medium-term notes: the total issuance scale shall not exceed 2 billion yuan, the basic term shall not exceed 5 years (including 5 years). At the end of each pricing cycle, the company has the right not to exercise the right of redemption.
plans to issue corporate bonds publicly: the total issuance scale shall not exceed 1.3 billion yuan. As of the end of the third quarter of 2018, the company's debt-to-asset ratio was 68.87%, and its interest expenditure in 2017 was 991 million yuan. Through the issuance of bonds, the capital structure was effectively adjusted (for example, the issuance of perpetual bonds can be included in equity) and financial costs were reduced.
html Coal production and sales in 018 fell by 1.4% and 4.1% year-on-year. It plans to acquire Henan Zhongping Coal and ElectricityCompany's coal production and sales in 2018 were 30.8 million tons and 25.79 million tons, respectively, down 1.44% and 4.15% year-on-year. Calculated based on the raw coal output, the revenue ton of coal and the cost of coal ton of coal were 554 yuan/ton and 424 yuan/ton respectively, down 0.23% and an increase of 1.72% year-on-year. The decline in the company's coal production was mainly due to the company's adjustment of the coal type structure and increasing the proportion of coking coal. This process requires a certain amount of time to continue the production work surface, causing a decline in output.
At the same time, on February 23, 2019, the company announced that it plans to acquire 50% of the equity of Zhongping Coal Power held by Pingmei Group for RMB 72.13 million. Zhongping Coal Power mainly serves the construction and operation of the thermal coal rapid coal transportation system. The operating income from January to November 2017 and 2018 was RMB 1.195 billion and RMB 1.339 billion, respectively, and the net profit was RMB 1.13 million and RMB 1.69 million, respectively. The acquisition of Zhongping Coal and Electricity will help accelerate Pingmei Co., Ltd.'s own asset optimization and integrate the coal industry chain.
is expected to have EPS of 0.32, 0.36 and 0.38 yuan in 2018-20
is the leader in coking coal in the central and southern regions and has strong regional pricing power. We are optimistic that the price is at a medium and high level under the tight supply of coking coal. On the other hand, although the adjustment of the coal type structure has caused the company's coal production and sales to decline in the short term, as the proportion of coking coal with high profitability increases after the adjustment, the company's profitability is expected to grow in the later period. The company's PE in 2018 is about 13.5 times and the PB is only 0.81 times (the arithmetic average PB of coal listed companies is 1.31 times), and the valuation is relatively low. It is prudent to estimate that the PB in 2018 is 1, and the company's reasonable value is 5.4 yuan per share, maintaining the "buy" rating.
Risk warning: downstream demand is lower than expected, coal prices and exceed expectations fell, the company's coal type structure adjustment progress is lower than expected, and the company's costs and expenses are rising too quickly.
Shangwei Co., Ltd.: The downstream fields are blooming, efficiency improvement helps improve profits
Shangwei Co., Ltd. 603333
Research institution: Zhejiang Securities Analyst: Zheng Dandan, Gao Zhipeng Date of Writing: 2019-03-06
Full in multiple fields, business development has entered the fast lane
Traditional market, rail transit, new energy, overseas and other fields are blooming. In 2018, the company achieved operating income of 766 million yuan in traditional downstream electrical equipment, metallurgy, petrochemical and other fields, an increase of 235.23% year-on-year; in the first year after entering the rail exchange domain, the company participated in the construction of subways in more than ten cities and the construction of intercity rail railways such as the Shanghai-Nanjing Line and the Changjiang Line, achieving revenue of over 158 million yuan; orders for new energy fields such as nuclear power, photovoltaics, and wind power continued to increase, and in 2018, it achieved revenue of 188 million yuan, an increase of 150.25% year-on-year; overseas, it continued to promote joint overseas travel, with revenue increasing by 33.3% year-on-year to 170 million yuan. In addition, according to our statistics, from November 2018 to the end of February 2019, the company successively signed orders of more than 1.05 billion yuan, equivalent to 67% of the revenue in 2018. The order volume is full, providing relatively favorable conditions for subsequent production scheduling and stocking. We believe that the company's business has achieved full bloom in multiple fields and has gradually entered the fast lane of development. With the expansion of subsequent business areas, the revenue volume is expected to continue to grow.
structure optimization and superimposed efficiency has been improved, product profitability has continued to improve
0 Since 2018, the company has continued to optimize customer structure and product structure, and achieved breakthrough progress in nuclear power, rail transit and other fields, with the overall gross profit margin level increased by 2.18 percentage points; in addition, the effect of the company's lean management has been reflected, and through reasonable production scheduling, the processing gross profit margin has been increased by 0.98 percentage points; in terms of expense control, in 2018, the company strictly controlled the budget in 2018, and the period expense rate decreased by 1.08 percentage points, of which the sales expense rate and management expense rate decreased by 0.84 and 0.61 percentage points respectively. We believe that under the favorable conditions that the customer and product structure continue to upgrade and the orders are still full, the company's product gross profit margin is still expected to further improve and further lower the period expense ratio, thereby driving the continuous improvement of profitability.
Investment advice
We expect the net profit from 2019 to 2021 to be RMB 108, RMB 202 and RMB 251 million, respectively, an increase of 85.85%, 87.07% and 24.39% year-on-year, corresponding to the current EPS of RMB 0.21, RMB 0.39, and RMB 0.48 per share under the current share capital. Take a comprehensive consideration and maintain the company's "overweight" rating.
Risk warning: New business expansion may not meet expectations, and competition for cable products may further intensify.
Sun Power: The performance forecast meets expectations, and I am optimistic about the leader in inverters in the long run
Sun Power 300274
Research institution: CICC Securities Analyst: Wang Ge Date of Writing: 2019-02-02
Event
Company released its 2018 annual performance forecast, with an expected profit of 800-850 million yuan, a year-on-year decrease of 17-22%. Non-recurring gains and losses were 110 million yuan, mainly from government reward and subsidy funds and financial product returns. Performance forecast meets expectations.
Brief review
performance forecast meets expectations. China's photovoltaic new installed capacity was 44GW in 2018, a year-on-year decline of 17%; overseas markets maintained growth, with global installed capacity exceeding 100GW throughout the year, maintaining stability year-on-year. The company's inverter and power station businesses grew overall, but due to the decline in prices in the industrial chain, the gross profit margin decreased and net profit decreased year-on-year.
is about to access the Internet in a parity, and I am optimistic about the leader in inverters in the long run. Recently, the industry has frequently released favorable policies, the policy of comparative Internet access has been released, and the quota system is about to be launched. It is expected that with the continuous introduction of supporting policies, the industry will switch from cycle to growth, and the installation capacity is expected to grow further. In terms of cost, with the promotion and application of 1500V systems, the gross profit margin of inverter products is expected to be restored, and we are optimistic about the inverter and power station system integration business in the long run. Energy storage is expected to explode. The company has the world's leading new energy power conversion technology, which can provide core equipment such as energy storage inverters with a single power of 5~1000kW, lithium battery energy management system, and has successfully participated in several energy storage demonstration projects such as Shanghai Yangshan Port and Tibet Cuoqin Microgrid. This business is expected to become a new growth point for the company in the future.
expects the company's operating income to be RMB 8.949/10042/11.501 billion in 2018-20, the net profit is RMB 840/977/1.176 billion, the EPS is RMB 0.58/0.67/0.81, and the PE is RMB 19.2/16.5/13.7 times. Maintain the "buy" rating.
Risk warning: Photovoltaic installation is less than expected, and there are risks of change in photovoltaic subsidy policies.
