[Smart Investment]Lungi Green Energy (601012): Monocrystalline PERC Leads the Era of Affordable Internet Access

[Smart Investment]Lungi Green Energy (601012): Monocrystalline PERC Leads the Era of Affordable Internet Access

summary.

We recently met with the leaders of Longji to discuss the development prospects of the company and the photovoltaic industry in 2019-20.

We are optimistic about Longji’s active expansion strategy. The main considerations are: 1) the demand for monocrystalline PERC products in overseas markets has steadily increased; 2) the company’s current combination of monocrystalline growth technology and diamond wire cutting technology is in a leading position in terms of cost;And 3) The recovery of demand in the Chinese market has a great chance to boost the average rate of monocrystalline PERC products in the second half of 2019.

  The world’s largest manufacturer of single crystal products.

Longji focuses on the production of monocrystalline silicon wafers, batteries and high-efficiency modules, and has more than 19 years of experience in the field of monocrystalline products.

The company is currently the world’s largest supplier of single crystal products.

  The recognized monocrystalline PERC products have higher photoelectric conversion potential in the era of parity on-grid, and are the best efficient photovoltaic technology products.

As of the first quarter of 2019, Longji’s large-scale mass production of monocrystalline PERC battery products exceeded 22%, leading China’s photovoltaic industry.

  Advanced technology and cost leadership constitute major advantages.

Longji is the first photovoltaic product manufacturer to achieve technological breakthroughs and fully introduce diamond wire technology to achieve single crystal silicon rod cutting.

Based on the company’s unique single crystal growth technology and the localization of key equipment, Longji successfully achieved cost leadership in the production of single crystal silicon wafers.

Since 2017, the demand for 南宁桑拿 monocrystalline silicon wafers for polycrystalline products has gradually been replaced, and high-efficiency monocrystalline products have gradually been introduced to replace the market’s demand for efficient products.

The company achieved a gross profit margin of 23 in the first quarter of 2019.

5%, it is expected that in the second quarter of 2019, the company’s gross profit margin will improve in the subsequent quarters due to the decline in regular material prices and the company’s non-silicon cost reduction measures.

  Market potential and expansion strategy.

As the short-term policy of the Chinese market is still uncertain before parity, Longji will focus on the sales of major photovoltaic module products in overseas markets.

It is initially estimated that the global photovoltaic installed capacity will reach 120 杭州桑拿 GW in 2019, and it is predicted that the outlook of the European market is optimistic.

The European market has had a very positive growth in the demand for photovoltaic modules after the end of the double counter.

In order to capture future growth, Longji plans to expand the capacity of monocrystalline silicon wafers to 65 GW by the end of 2021, corresponding to a compound annual replacement capacity of 32 in 2018-21.

4%.

  The long-term outlook is optimistic and it is estimated to remain attractive.

Longji’s 2019/20 forecast price-earnings ratios are 21 respectively.

1x / 16.

6 times, and the peer estimate is about a clear estimated premium.

In view of its leading market prospects, the potential for rapid expansion of production capacity and profit maximization, we believe that the company still has upside in terms of profit performance and estimation.