TONGWEI CO.,LTD(SH:600438) SINOLINK SECURITIES·2024-10-31 02:05Investment Rating - The report maintains a "Buy" rating for Tongwei Co., Ltd. (600438.SH) [2] Core Views - The decline in polysilicon costs and steady progress in integration are highlighted as key factors for the company's performance [2] - The company reported a revenue of 68.3 billion RMB for the first three quarters of 2024, a year-on-year decrease of 39%, with a net profit attributable to shareholders of -3.97 billion RMB, also a year-on-year decline [2] - The report emphasizes the company's competitive advantages in the polysilicon and battery segments, as well as growth potential in the module business [3] Summary by Sections Business Performance - In Q3 2024, the company achieved a revenue of 24.5 billion RMB, down 34% year-on-year, with a net profit of -844 million RMB, showing a significant reduction in losses compared to Q2 [2] - The cash cost of polysilicon has significantly decreased due to favorable hydropower pricing during the flood season, alongside a drop in industrial silicon prices [2] - The company maintained a high operating rate despite polysilicon prices falling below industry costs, which helped in reducing overall costs and enhancing profitability [2] Industry Analysis - The polysilicon industry is undergoing a rapid clearing process due to profit pressures, with a notable decrease in domestic monthly production from 190,000 tons to 130,000-140,000 tons [3] - The company’s new polysilicon projects in Yunnan and Baotou are expected to enhance its production capacity to 850,000 tons by year-end, benefiting from lower electricity costs [3] Technological Advancements - The company has completed the transformation of its 38GW PERC capacity and is ramping up production in its new TNC battery lines, with a total TNC capacity expected to exceed 100GW by year-end [3] - New technologies such as HJT, XBC, and perovskite cells are being developed, with plans to launch a unique HJT + copper interconnection solution by the end of 2024 [3] Financial Projections - The net profit forecasts for 2024-2026 have been adjusted to -5.05 billion RMB, 5.03 billion RMB, and 7.68 billion RMB respectively, with the current stock price corresponding to a PE ratio of 26 and 17 for 2025 and 2026 [3] - The report anticipates a revenue growth rate of 24.91% in 2025 and 15.92% in 2026, reflecting the company's recovery and growth trajectory [5]