Tongwei (600438) Interim Report Performance Review: Results Continue to Exceed Expected Profitability

Tongwei (600438) Interim Report Performance Review: Results Continue to Exceed Expected Profitability
Event: The company announced the 2019 interim report pre-increasing announcement. The company expects that the semi-annual results for 2019 will increase by 50,495.RMB 860,000-59,676.920,000 yuan, an annual increase of 55% -65%.After non-recurring gains and losses, the company’s performance is expected to increase by 48,947.10,000 yuan-57,846.460,000 yuan, an annual increase of 55% -65%. The volume of battery business has grown significantly, and the maximum production capacity has gradually increased.According to the number of reports, the company’s gradual expansion of solar cells has increased by about 97% each year, and its scale advantage has become prominent.Among them, the newly built Chengdu3.2GW and Hefei 2.The capacity of the 3GW high-efficiency crystalline silicon battery project has been reached through commissioning and improvement. The capacity utilization rate reached 78% in the first half of the year. The overall capacity utilization rate of the existing company’s battery business has exceeded 110%.At the same time, production process indicators and non-silicon costs have been further optimized, and profitability has continued to increase.According to the company’s plan, the company’s solar cell scale is expected to reach 20GW by the end of 2019, which will further increase the concentration of the industry and consolidate the company’s scale advantage in solar cells. Silicon material business continued to make a profit.In the first half of the year when the price of high-purity crystalline silicon was relatively low, the company’s high-purity crystalline silicon business still maintained continuous profitability.With the gradual release of the additional production capacity of Baotou and Leshan, the increase in production and sales has increased, and these production indicators have continued to be optimized.In the first half of the year, Baotou and Leshan’s new project capacity was released by about 20%. It is expected that the capacity will be fully released in the second half of the year.At present, the company’s silicon material production capacity has entered the ranks of the top three in the world, and the new production capacity has taken full advantage of many years of technology accumulation and scientific research results. It has made several optimizations and improvements in advanced process design and system operation reliability, etc.The growth rate is 40,000 yuan / ton. Give play to the competitive advantages of aquatic feed and increase sales significantly.In the traditional agricultural sector, the company’s feed business highlights the competitive advantages of its core products, aquatic feeds, strengthens the sales of special feeds and the development of major customers. The sales of aquatic feeds increased by about 25%, supporting the company’s performance. The fishery-light integrated project has been steadily launched.The company takes “Photovoltaics to change the world” as its core concept, and has the unique advantage of resource integration in photovoltaic terminals. It has formed an innovative development mode of fishing and light integrated with “upper power generation and lower fish farming”. This model improves the traditional photovoltaic power generationThe operation and income methods, combined with the company’s “365 healthy breeding model”, have expanded the field of photovoltaic technology application and formed the company’s unique core competitiveness.As for the investment cost of photovoltaic power plants, the company has been practicing the “543” cost strategy for many years. Through design optimization and technological innovation, it has reduced the investment cost of photovoltaic power plants year by year.At present, the 深圳桑拿网 comprehensive investment cost of the project has fallen from 6-7 yuan / W two years ago to less than 5 yuan / W; through continuous technological advancement and further optimization of the design plan, the cost will be replaced by 4 yuan / W in 2019, which will accelerate the overall speedAchieve the parity of Internet access and promote the sustainable and healthy development of the industry. Investment suggestion: The company’s photovoltaic sector continues to exert its strength, its capacity expansion is steadily advancing, its products are favored by the market, and its profitability continues to increase.It is expected that the company’s net profit for 2019-2021 will be 30.19, 37.29 and 42.0.94 million yuan, corresponding to EPS0.78, 0.96 and 1.11 yuan / share, corresponding to PE17, 14 and 12 times, given a “buy” 杭州桑拿网 rating. Risk reminder: less-than-expected capacity expansion and less-than-expected product sales.