Zhonghuan (002129): Photovoltaic, semiconductor wafer two-wheel drive production capacity expansion leading position stable

Company dynamics The company released its 2018 annual report.

In 2018, the company achieved total operating income of 137.

5.6 billion, an annual increase of 42.

63%, achieving net profit attributable to shareholders of listed companies.

3.2 billion, an annual increase of 8.


Matter comments The semiconductor industry has been deeply cultivated for decades, and its profitability has increased. Import substitution has started. In 2018, the company’s semiconductor wafer sales volume reached 3 vertical.

7.4 billion square inches, an increase of 50 in ten years.


The semiconductor materials business achieved operating income10.

1.3 billion, an annual growth of 73.

55%; business gross margin of 30.

08%, an annual increase of 6.

45 supplements, significantly improved profitability.

The overall development of silicon wafers is toward the trend of large size. 8-inch and 12-inch silicon wafers have become the mainstream products of semiconductor wafers, with a market share of more than 90%.

With the rapid development of emerging technologies such as the Internet of Things, artificial intelligence, and automotive electronics, the market demand for 8-inch and 12-inch silicon wafers is growing.

The global demand for 8-inch and 12-inch silicon wafers in 2017 was 5.25 million wafers / month and 5.47 million wafers / month, and the production capacity was 5.58 million wafers / month and 5.4 million wafers / month respectively. It is expected that 8-inch and 12-inch wafers will be reached by 2020.The demand will exceed 6.3 million tablets / month and 6.2 million tablets / month, respectively.

At the same time that demand is expected to grow rapidly, the large-size silicon wafer market will appear to be seeking alternative funding.

At present, only a few companies have the production capacity of 8-inch semiconductor wafers, and 12-inch semiconductor wafers mainly rely on imports.

In 2018, the company’s Tianjin base has an existing capacity of 300,000 wafers per month for 8-inch wafers and 20,000 wafers per month for 12-inch wafers. New capacity in Wuxi can also be gradually released in 19 years.

The company’s non-public offering of donations in 2019 plans to build a production line with a monthly output of 750,000 pieces of 8-inch polishing pads and a monthly output of 150,000 pieces of 12-inch polishing pads, which further consolidates and enhances the company’s core competitiveness and leading position.

In 2018, the company’s new energy materials business achieved operating income of 124.

2.7 billion, an increase of 41 every year.


Business gross profit margin 16.

35%, a decline of 3 per year.

34 outstanding, the main consideration is “5.

After the “31” New Deal, the domestic photovoltaic industry chain prices have fallen sharply.

The company supplemented the price with quantity and gradually realized the sales of photovoltaic monocrystalline silicon wafers29.

200 million pieces, a 135% increase in ten years.

At the end of 2018, the company’s overall solar-grade monocrystalline silicon material capacity reached 25GW, and it is expected to reach 28-30GW in 2019.

Recently, the company signed a cooperation agreement with the People’s Government of Hohhot, and plans to invest 9 billion U.S. dollars in the construction of the “Central Phase 5 25GW Monocrystalline Silicon Project”.

The company’s self-developed high-efficiency N-type single crystal silicon wafers have a global market share of more than 70%, with advantages such as high conversion efficiency and large cost reduction potential. In the future, P-type batteries will gradually be 杭州夜网论坛 replaced as mainstream products.

With the warming of the domestic photovoltaic industry policy and the pull of overseas demand, the expansion of PV downstream monocrystalline PERC cells has accelerated, and the company as one of the duopoly of photovoltaic monocrystalline wafers will fully benefit from the boost of downstream demand.Wafer gross profit margin will pick up.

Earnings forecast and estimation We expect the company’s operating income in 2019, 2020 and 2021 to be 183.

33, 230.

01 and 280.

9.7 billion yuan, with growth rates of 33.26%, 25.

48% and 22.

15%; net profit attributable to shareholders of the parent company is 10 respectively.

55 billion, 16.

4.8 billion and 23.

5.0 billion yuan, with a growth rate of 66.

94%, 56.

14% and 39.

88%; Fully diluted earnings per share are 0.

38, 0.

59 and 0.

83 yuan, corresponding to PE is 26.

18, 16.

76 and 11.

99 times.

Since the end of 18, the warming of the photovoltaic industry and overseas demand have stimulated. We expect the profitability of the company’s photovoltaic wafer business to pick up in 2019.

With the gradual release of the company’s capacity to add large semiconductor wafers, the industry’s import substitution is accelerating, and the company’s one step ahead will be consolidated.

By then, the company will truly usher in a new era of photovoltaic and semiconductor two-wheel drive.

Covered for the first time, giving the company an “overweight” rating.

Risks suggest that the company’s capacity release progress is not up to expectations, the photovoltaic industry demand is weak, and photovoltaic and semiconductor wafer prices have fallen.