Tongwei (600438): Steady optimization of operations and breakthroughs

Tongwei (600438): Steady optimization of operations and breakthroughs
Event description Tongwei shares tracking report. Event commentary The industry’s short-term demand is booming, and the probability of exceeding expectations in the medium-term is high.In the short term, the domestic market is supported by bidding projects carried forward in 2019, and the installed demand for 2020Q1 is stable compared to the planned period; overseas markets in the British fiscal year, the national grid season, India ‘s protection tax is reduced, and the United States ‘ITC rush installation and other needs remain high in 2020Q1Boom.Initially, the domestic market is expected to reach about 50 GW in 2020, driven by bidding and parity projects; overseas is driven by the core of parity projects, and installations are expected to gradually increase; in 2020, global photovoltaic installations exceed the expected probability conflict. The price of silicon materials may rise steadily in 2020, and the company is expected to benefit significantly.According to our budget analysis, in 2020, silicon materials are expected to have the strongest transformation of the supply and demand pattern in the main industrial chain. 2020Q1-Q3 is expected to have overall price fluctuations, and 2020Q4 is expected to have a strong price trend under the background of strong demand.As the world’s leading silicon material company, the company currently has a silicon material production capacity of over 8 tons, of which the new production capacity of Hefei and Leshan exceeds 3 tons, and the old production line of Leshan exceeds 2 tons, and there is still room for optimizing production.At the same time, the proportion of dense materials and costs continue to be optimized. At present, the company’s overall proportion of dense materials exceeds 80%, and some production lines reach more than 85%. The total cost of Leshan’s old production capacity has fallen by about 5 million tons / ton. Hefei and Leshan’s new production capacity have alreadyBelow 4.50,000 tons / ton.The current profit level of silicon materials is at a historical low level, and the trend of later repair is clear. The battery business actively embraced new technologies and steadily expanded its breakthroughs.As a leading company in battery chips, the company continues to 杭州夜网论坛 implement a scale expansion strategy. In November 2019, Chengdu Phase IV (166 size) was put into production. It is currently in a ramp-up period and will reach full production in 2020Q1; Meishan Phase I (compatible with 210 size) is about to start production.After the above-mentioned capacity is put into production, the company’s battery capacity will reach about 23GW, which is nearly doubled with reference to about 12GW in 2019Q1.In terms of cost, the company’s battery non-silicon cost has dropped to zero.20-0.25 yuan / W interval, the space can still be optimized later.At the same time as PERC’s capacity expansion, the company is actively deploying new battery technology routes. It is an enterprise with an internal layout and layout of HJT. As early as June 2019, Chengdu’s 200MW production line has been successfully produced.Reserves: At the time of future breakthroughs in HJT technology, the company will benefit from strong technical reserves and its ability to rapidly expand production capacity, benefiting from strong certainty. We expect the company’s EPS to be zero in 2020-2021.97, 1.23 yuan, corresponding to 14, 11 times the PE, continue to recommend. Risk Warning: 1. The installed capacity of the industry did not meet expectations.