TONGWEI CO.,LTD(SH:600438) Changjiang Securities·2025-08-28 12:43Investment Rating - The investment rating for the company is "Buy" and is maintained [8]. Core Views - In the first half of 2025, the company reported a revenue of 40.509 billion yuan, a year-on-year decrease of 7.51%, with a net profit attributable to shareholders of -4.955 billion yuan. In Q2 2025, revenue reached 24.575 billion yuan, showing a year-on-year growth of 1.44% and a quarter-on-quarter increase of 54.24%, with a net profit of -2.363 billion yuan [2][6]. Summary by Sections Financial Performance - In H1 2025, the company sold 161,300 tons of silicon, capturing approximately 30% of the global market share. The silicon consumption per kilogram of silicon material decreased to below 1.04 kg/kg.si, with steam consumption nearly zero. The N-type material's metal content dropped to below 0.1 ppbw, and surface metal content reduced to below 0.2 ppbw, indicating potential for further cost optimization. However, due to the decline in silicon prices, the losses in the silicon business are expected to widen in Q2 2025 [11]. - The company maintained its position as the global leader in battery shipments, with H1 2025 battery sales reaching 49.89 GW. The company continues to explore cost reduction and efficiency enhancement, with key competitive indicators such as product A-grade rate, conversion efficiency, and non-silicon costs leading the industry. The newly launched TNC2.0 component product achieved a maximum power output of 645W (210R version). The unit profitability in Q2 2025 is expected to show significant recovery compared to Q1 due to the impact of domestic price increases [11]. - In the component business, H1 2025 component sales reached 24.52 GW (with 5.08 GW sold in overseas markets), representing a year-on-year growth of 31.33%. The domestic distributed shipment continues to lead the market, and the centralized sales maintain good cooperation with major state-owned power enterprises. The company’s production indicators, such as A-grade rate and fragment rate, are industry-leading and further optimized, with non-battery costs per watt decreasing by 11% year-on-year and period expenses dropping by 31% year-on-year, indicating a recovery in profitability in Q2 compared to Q1 [11]. - Financially, the company recognized an asset impairment loss of 2.421 billion yuan due to inventory depreciation in H1 2025, with Q2 accounting for 1.625 billion yuan, which negatively impacted performance. The company demonstrated excellent expense control, with a period expense ratio of 8.46% in Q2 2025, a decrease of 4.99 percentage points quarter-on-quarter, primarily due to a reduction in management expense ratio to 2.5%. The asset-liability ratio decreased by 0.32 percentage points to 71.9% in Q2 2025, and if convertible bond liabilities are excluded, the ratio stands at 66%. The company has sufficient liquidity with cash and trading financial assets amounting to 33.2 billion yuan [11].