Zhonghuan (002129) Incident Review: Production Capacity Continues to Expand, Large Wafer Leads Industrial Upgrade

Zhonghuan (002129) Incident Review: Production Capacity Continues to Expand, Large Wafer Leads Industrial Upgrade

Event: The company released a semi-annual report and achieved revenue of 79 in the first half.

42 trillion, an annual increase of 23%, net profit attributed to the mother4.

520,000 yuan, an increase of 51% in ten years.

Deduct non-attributed net profit 3.

540,000 yuan, an increase of 59% in ten years.

Key points of investment: The performance is in line with expectations, and the capacity of monocrystalline wafers is orderly expanded.

The company’s first-half performance was close to the median forecast, and the overall performance was in line with expectations, of which the second quarter net profit2.

USD 6.5 billion, a year-on-year growth of 51% and a growth of 41% month-on-year. The company’s new energy materials realized revenue of USD 7 billion, a year-on-year increase of 22%, mainly due to the growth brought by the new capacity of single crystal silicon wafers.

The company’s key internal Mongolian region has expanded photovoltaic material production capacity, and the four and four phase transformation projects have all reached capacity. In the first half of 2019, the total photovoltaic monocrystalline silicon material production capacity reached 30GW, and the monthly output exceeded the breakthrough.

At present, the fifth phase of the project has been successfully started. After the fifth phase of the project is put into production, the monocrystalline silicon wafer capacity of the Zhonghuan Industrial Park will reach 55GW. The demand for photovoltaic efficiency will drive the industry into the single crystal era. The company’s expansion trend is obvious.Lulu.

The introduction of photovoltaic M12 large silicon wafer products, leading a new round of industrial revolution.

The company launched the world’s first M12 large silicon wafer series products on August 16th, with a side length of 210mm, and an area proportion increased by 80 compared with the current general-purpose M2 products.


M12 can be reduced by 0.

The non-silicon cost 成都桑拿网 of 205 yuan / W is reduced by 19 for M2.


The new products will greatly increase the productivity of cells and modules. Among them, the power corresponding to M12 products can reach 600W. The theoretical calculation will reduce the cost of electricity by more than 6%, which will accelerate the progress of photovoltaic parity on the Internet. M12 products may reshape the photovoltaic industry and lead the way.The industry chain further reduced costs and increased efficiency.

Semiconductor material international customers achieved breakthroughs, and product structure upgrades continued to advance.

In the first half of the year, the company’s semiconductor materials achieved revenue5.

USD 100 million, a year-on-year increase of 21%, the company’s products accounted for more than double the proportion of sales of first-class international customers, laying a 北京夜网 good foundation for the continued growth of the company’s business. By supplying first-class international customers, the company’s international reputation and recognition has been further improved.
The company continues to promote product structure upgrades and organizes the implementation of “Semiconductor Large Silicon Wafers” projects across Tianjin, Inner Mongolia and Jiangsu.

Among them, in the first half of 2019, the Tianjin plant’s 8-inch silicon wafers have achieved design capacity; the 12-inch test line project has been put into production in February, and the 12-inch project is expected to move equipment in the fourth quarter of 2019, and start production in the first quarter of 2020.The large silicon wafer business has become a potential growth point in the future.

The improvement of management efficiency pushed the net interest rate upward.

The company achieved a gross profit margin of 17 in the first half of the year.

43%, a decline of 2 per year.

56pct, of which the new energy materials sector achieved a gross profit margin of 14.

90%, a decline of 3 per year.

62pct, mainly because the price of single crystal silicon wafers has decreased compared to the same period last year, and the gross profit margin of the semiconductor materials business in the first half of the year was 26.

82%, a decline of 0 every year.

34 points.

The company’s management expense ratio reached 4 in the first half of the year.

4% (including R & D expenses), which decreases by 3 every year.

32pct, the improvement of management efficiency directly pushed the company’s net profit rate to 7.

74%, an increase of 2 a year.

31pct, the company realized net cash flow from operating activities in the first half of the year8.

50,000 yuan, an increase of 58% in ten years, cash flow continued to improve.

Profit forecast and investment grade: 1) Monocrystalline silicon wafers present a duopoly form, transforming the industry chain to reduce costs and increase efficiency, and the trend of monocrystalline substitution of polycrystalline silicon is clear. The company’s capacity expansion as a single crystal silicon wafer leader is obvious, and it will emerge from the strong in the future.On the road of Hengqiang, M12 products may lead the industry to reduce costs and increase efficiency, and accelerate parity on the Internet; 2) 8-inch semiconductor silicon wafers have mature supply capabilities, and have begun research and development of 12-inch large silicon wafers. The core competitiveness is the company’s silicon wafersTechnology accumulation over the years.

Regarding the impact of non-public offerings on the company’s performance and equity for the time being, it is expected that the company’s net profit for 2019-2021 will be 12 respectively.7/17.


2 trillion, corresponding PE is 24/17/13 times.

Maintain “Buy” rating.

Risk reminder: the new production capacity is less than the expected risk; the silicon wafer price is significantly reduced; the risk of raw materials; the policy risk; the non-public offering is less than the expected risk;