GCL TECH(03800) 兴证国际证券·2024-09-20 01:40Investment Rating - The report maintains an "Accumulate" rating for the company [1][2]. Core Views - The company is focusing on granular silicon technology, with a structured capacity release and an overseas expansion strategy that leverages the carbon emission and ESG advantages of granular silicon. The low energy consumption and cost advantages of granular silicon help the company navigate through market cycles. Product quality is improving, and the price gap with rod-shaped silicon N-type products is narrowing. As an intermediate product in granular silicon production, the company benefits from a leading cost advantage in silane gas, driven by downstream demand recovery, leading to profit growth. The company also has advanced perovskite technology and is building GW-level production lines to expand long-term capacity. [1] Summary by Sections Financial Performance - In H1 2024, the company's revenue decreased by 57.7% year-on-year to 8.86 billion yuan, primarily due to a significant drop in silicon material and wafer prices, partially offset by an increase in silicon material shipment volume. - Gross profit for 2024 was -550 million yuan, a decrease of 9.33 billion yuan year-on-year, with a gross margin decline of 48.1 percentage points to -6.2%, attributed to falling product prices. - The company recognized an inventory impairment of 820 million yuan due to the decline in silicon material and wafer prices. - Net profit for H1 2024 was -2.02 billion yuan, with the attributable net profit at -1.48 billion yuan, a decrease of 7 billion yuan year-on-year, in line with expectations. - The company has repurchased shares worth 58 million yuan, 182 million yuan, and 24 million yuan in 2022, 2023, and H1 2024 respectively, with plans for a total repurchase or dividend distribution of no less than 2.5 billion yuan from 2024 to 2026. [1] Granular Silicon Production - The company has gradually released granular silicon capacity, with production capacity reaching 420,000 tons by the end of H1 2024. - The company plans to add 60,000 tons of module capacity in Xuzhou and expand capacity in the Middle East. - In H1 2024, granular silicon production increased by 66% year-on-year to 136,000 tons, with shipments (including internal sales) up 76% to 126,000 tons, and external sales up 85% to 121,000 tons. The average selling price of granular silicon was 40.3 yuan/kg. [1] Cost and Quality Advantages - Granular silicon has low energy consumption, providing cost and carbon footprint advantages. As domestic preferential electricity prices are gradually eliminated, the company's cost advantage over peers may widen. - Product quality is improving, with the total metal impurity ratio for granular silicon at ≤0.5 ppbw reaching 95.8% in July 2024, a significant increase from Q2 2023. - The company's products with a quality rating of 910A and above accounted for 96.6% of total products, an increase of 11.3 percentage points from February 2024. - The company has introduced a "turbidity" concept to represent the content of granular silicon powder, with 99.9% of products having turbidity <120 NTU in July 2024, a 79.3 percentage point increase from Q1 2023. [1] Silane Gas Business - The silane gas business is expected to benefit from demand in silicon-carbon anodes, photovoltaic cells, semiconductors, and display panels. As an intermediate product in granular silicon production, the company has a significant cost advantage in silane gas, which is expected to contribute to profit growth. [1] Perovskite Technology - The company is advancing its perovskite technology through its subsidiary, with the world's first 100MW perovskite pilot production capacity established. A groundbreaking ceremony for a GW-level large-scale perovskite production base was held in December 2023. The conversion efficiency of the company's 1×2m perovskite single-junction module is 19.04%, and the efficiency of the 369×555mm stacked module is 27.34%. [1]