The Price Rise Of Silicon Material Promotes The Mid-Term Performance Of The Leader To Increase Sharply, And It Will Take Time For The Price Inflection Point To Appear

In Leshan, Sichuan Province, known as China's "Green Silicon Valley", another large-scale polysilicon project has been launched here.

On the morning of June 30, Tongwei Co., Ltd. formally signed a project investment agreement with Leshan Municipal government and WUTONGQIAO district government, planning to invest in Wutongqiao District of Leshan City to build a high-purity crystalline silicon project with an annual output of 200000 tons. The total investment of the project is estimated to be 14 billion yuan. For this project, Tongwei said that it meets the needs of the company's business strategy and the development plan of high-purity crystalline silicon business, and the scale effect is prominent.

In the view of the outside world, the continuous investment of new polysilicon production capacity will also help to change the tense supply-demand relationship in the domestic photovoltaic industry chain, but when the price inflection point will come is still unknown.

However, it is certain that Tongwei, as the global leading enterprise of silicon materials, has made a lot of money in this round of supply chain price rise. The company's half yearly earnings forecast showed that its net profit increased by at least 177% in the first half of this year. 21st century economic report reporter noted that under the circumstance that the net profit growth rate in the first quarter has reached 146%, the higher net profit growth means that Tongwei shares have better performance in the second quarter of this year.

Silicon price increases support performance

In an interview with the 21st century economic report, a senior analyst in a new energy industry commented that Tongwei Co., Ltd. made back the "lost money" in the same period of last year due to the epidemic in the first half of this year.

According to the performance forecast released by Tongwei Co., Ltd., from January to June this year, the company is expected to realize a net profit of 2.8 billion yuan to 3 billion yuan belonging to the shareholders of the listed company, an increase of 1.79 billion yuan to 1.99 billion yuan over the same period of last year, with a year-on-year increase of 177% to 197%.

It is worth mentioning that after deducting the non recurring profit and loss, the net profit data of Tongwei in the first half of this year is still 2.8 billion yuan to 3 billion yuan. This indicates that such performance data contains a high amount of gold.

In view of the high-speed growth performance, Tongwei explained that "the high-purity crystalline silicon business benefited from the growth of downstream demand, and the product supply was in short supply, and the market price was significantly increased year on year. The company's high-purity crystalline silicon business was full of production and sales, and its profit was greatly increased; Under the special circumstances of unbalanced supply and demand in the industrial chain, the company's battery chip business still maintained full production and sales, and both volume and profit achieved a significant growth year on year. " That is to say, the volume and price of PV business have risen simultaneously, which has become the main driving force for the increase of net profit.

"Last year, due to the epidemic situation, the demand and price of polysilicon materials of Tongwei Co., Ltd. both fell. The superimposed battery business barely broke even. With the filling of feed business, the company as a whole can maintain a profitable State." The analyst told 21st century business reporter.

In the listing system of Tongwei, its main business is divided into feed and photovoltaic. After the completion of photovoltaic assets injection in 2015, Tongwei shares entered the era of dual main business: on the one hand, feed business provides stable cash flow; On the other hand, photovoltaic business has entered a period of rapid growth.

The inflection point appears in 2019, and the revenue scale of photovoltaic business of Tongwei company officially exceeds that of feed business. At the same time, Tongwei shares gradually ranked first in the world in terms of polysilicon materials and cell chip production capacity.

In the photovoltaic business segment of the company, the cell business contributes the largest revenue source, while the polysilicon material business is the main embodiment of profitability. This also directly leads to the quantity and price of polysilicon materials, which affects the overall profit of Tongwei shares.

In the first half of 2020, Tongwei's photovoltaic business suffered setbacks. Due to the impact of the epidemic situation, the domestic demand for photovoltaic installation has declined, and the price of polysilicon materials has continued to fall. By the end of June 2020, the average transaction price of domestic polycrystalline silicon materials (for single crystal, the same below) was less than 60000 yuan / ton, down 18% from the beginning of the year. In the first half of the year, although the sales volume of polysilicon materials of Tongwei Co., Ltd. increased to 45000 tons on a year-on-year basis, the gross profit margin of its silicon material business decreased by 0.7 percentage points compared with the end of 2019 due to the price decline. Financial data show that Tongwei shares achieved a net profit of 1.010 billion yuan in the first half of last year, a year-on-year decrease of 30.35%.

With low cost, Tongwei's polysilicon material business has maintained a certain profitability when the epidemic is serious. In the second half of the year, the supply and demand relationship of polysilicon material industry chain was tense, and the price of silicon material rose sharply, the gap of the company's profit decline was quickly made up.

By the end of 2020, the average transaction price of domestic polysilicon has recovered to 86000 yuan / ton, with an increase of 46% in half a year. Therefore, in the second half of last year, the overall net profit of Tongwei shares increased significantly.

Since the beginning of this year, the price of polysilicon material has been soaring. According to the price released by the silicon industry branch of China Nonferrous Metals Industry Association, as of June 30, the average transaction price of domestic single crystal compound feeding and single crystal dense material reached 217200 yuan / ton and 213400 yuan / ton, respectively, with an increase of more than 250% compared with the price at the beginning of the year. This is an important performance support for photovoltaic upstream enterprises represented by Tongwei.

It is difficult to reverse the relationship between supply and demand in the short term

Tongwei will continue to be the world's leader in silicon production.

According to the latest production capacity plan, Tongwei will have a capacity of 330000 tons by the end of 2022 after the first phase of the polysilicon project is put into operation.

In the current domestic polysilicon material supply shortage situation, since this year, some polysilicon enterprises have put forward the expansion plan.

On February 8, 2021, TBEA announced that its holding subsidiary, new special energy, signed an investment framework agreement with Baotou Municipal People's government and tumete Right Banner people's Government in Baotou City, Inner Mongolia. The cooperation content includes: annual output of 200000 tons of high-purity polysilicon and supporting 200000 tons of industrial silicon and new energy power station development project. Among them, the annual output of 200000 tons of high-purity polysilicon project will be divided into two phases, the first phase construction capacity of 100000 tons.

The reporter of 21st century economic report noted that the total investment of the first phase project was nearly 8.8 billion yuan, and some photovoltaic downstream enterprises were attracted to participate. On June 18, TBEA released the investment progress announcement of the project, and Jingke energy and Jingao Technology participated in the investment in the form of capital increase and share expansion - the two enterprises respectively increased capital by 315 million yuan.

In addition, poly GCL energy and Daquan new energy also launched plans to expand production. Among them, poly GCL Energy announced its share allotment plan in January this year, with a plan to raise HK $4.212 billion for the expansion of granular silicon production. By the end of 2020, poly GCL energy's granular silicon production capacity is 10000 tons, and it plans to increase the production capacity to 32000 tons by the end of this year.

In fact, since the middle of June this year, the game mood of domestic photovoltaic industry chain has slowed down, the price of polysilicon material has stabilized, and the price of silicon wafer has been reduced. Although many enterprises have thrown out plans to expand production, in the view of industry insiders, the possibility of silicon material price reduction in the short term is low.

"At present, the production expansion plans announced by major enterprises are put into production after 2022." The aforementioned analysts told the 21st century economic report that the supply-demand relationship of domestic polycrystalline silicon materials is difficult to change substantially in the short term. Even if new production capacity is put into operation next year, the price of silicon materials will be stabilized at above 100000 yuan / ton.

Yao Yao, a new analyst of Guojin securities and power, also pointed out in the research report that the supply and demand of silicon materials in 2021 is still in short supply, and the price reduction space may be very limited, and the supply and demand of silicon materials next year will not be seriously excessive“ Considering that there is almost no new production capacity released before the end of the year, and the production capacity of silicon wafer is far greater than that of silicon material, the price reduction space of silicon material in this year may be very limited, and the profit situation of the company (Tongwei Co., Ltd.) may be better than the market expectation. "

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