Zhang Xiaojing Securities Times
On the evening of May 10, LONGi issued an announcement stating that in order to better reflect the company's strategic layout and main business positioning, and further strengthen its brand image and company value, the company's securities abbreviation will be changed from "LONGi" on May 16, 2022. Shares” was changed to “LONGi Green Energy”, and the company’s stock code “601012” remained unchanged.
Regarding the reasons for changing the abbreviation of the securities, the company stated that the company is committed to promoting low-carbon energy reform, and has long been focusing on providing high-efficiency monocrystalline solar power generation solutions for global customers. Currently, it is mainly engaged in the research and development of monocrystalline silicon rods, silicon wafers, cells and modules. , production and sales, provide products and system solutions for the development of photovoltaic centralized ground power stations and distributed roofs, and actively deploy and cultivate photovoltaic hydrogen production business from 2021.
The name change of LONGi shares aroused heated discussions among netizens. Some people said, "Why not change the name to LONGi Hongneng or LONGi Nenghong?", some directly said "the reason for the decline can be found", and others speculated that "the name change to Green Energy may be hydrogen technology." Is there any progress?"
Production costs continue to rise
According to the 2021 annual report recently disclosed by LONGi, the company achieved a revenue of 80.932 billion yuan, a year-on-year increase of 48.27%; a net profit of 9.086 billion yuan, a year-on-year increase of 6.24%.
If viewed by a single quarter, LONGi's net profit in the fourth quarter of 2021 has experienced a substantial decline, down 30.33% year-on-year.
During the reporting period, LONGi's module sales, market share and brand influence ranked first in the world. In terms of sales area, LONGi's market share in Asia-Pacific, Europe, Middle East and Africa and other countries and regions has achieved leading position, and the company's module sales have Realize from the global total leadership in 2020 to the overall leadership in the world's major market segments in 2021, and further consolidate the leading position in the market.
However, LONGi's performance this time was lower than market consensus.
Analysis believes that during the reporting period, the company's operations faced multiple challenges such as shortage of raw materials, poor logistics and soaring prices, the US WRO (customs withholding order) incident, and overseas epidemic control.
Especially with the rising price of upstream silicon material, production cost has become the main problem that squeezes the profitability of LONGi.
According to the financial report, as of the end of 2021, the company's operating cost was 64.59 billion yuan, a year-on-year increase of 56.98%. Among them, the raw material cost accounted for the highest proportion and the largest year-on-year increase, reaching 49.625 billion yuan, a year-on-year increase of 76.83%.
According to the data disclosed by the China Photovoltaic Association, in 2021, the highest price of silicon material will increase by 224%.
In January of this year, the price of silicon material dropped for a while, but it quickly resumed its rise since then.
On April 27, 2022, the Silicon Industry Branch of China Nonferrous Metals Industry Association announced the latest silicon material prices, and the average transaction price rose for 15 consecutive weeks.
Silicon prices have been flat in the last week.
In addition, according to the 2022 first quarter report disclosed by LONGi, the company achieved revenue of 18.6 billion yuan and net profit of 2.66 billion yuan during the reporting period, an increase of 17.29% and 6.46% year-on-year respectively. The growth rate of net profit in the first quarter of this year was much lower than that of the same period last year. level.
Seeking business transformation in two areas
In the 2021 annual report, LONGi used a large amount of space to mention new businesses such as BIPV and hydrogen energy, which are also the two main business areas that LONGi is seeking to transform.
In order to continuously expand the application scenarios of photovoltaic downstream, the company actively cultivates and promotes the development of new businesses such as BIPV and hydrogen energy.
During the reporting period, the company formulated BIPV product development and program standardization, and established supporting production capacity.
In March 2021, the company participated in a 24.28% stake in Sente shares through an agreement to transfer equity, becoming its second largest shareholder.
In March 2022, LONGi Green Construction, a wholly-owned subsidiary of the company, signed an equity transfer agreement with Sente Shares, and the company sold 100% of its subsidiary LONGi Engineering to Sente Shares.
After this equity transfer, the new building photovoltaic integration project undertaken by the company and Sente shares in the field of metal enclosures will be undertaken, implemented and delivered by Sente shares. The company will focus on the research and development, production and sales of BIPV products. The only partner in this field.
In addition, during the reporting period, the company established Xi'an LONGi Hydrogen Energy Technology Co., Ltd., which is committed to becoming the world's leading provider of large-scale green hydrogen equipment and solutions, providing green hydrogen solutions for the global green and low-carbon transition.
The establishment of the hydrogen energy business team has been completed, the business planning and positioning are basically clear, and the first 1000Nm³/h alkaline water electrolyzer has been successfully rolled off the production line. Marketing efforts are progressing steadily.
"Super Niu San" continued to increase positions, and institutions continued to be optimistic
In the secondary market, the stock price of LONGi shares fluctuated down after hitting a record high of 103.3 yuan per share in November last year, and fell to a stage low of 56.20 yuan per share. The stock price rebounded slightly.
As of the close on May 10, the company's stock price fell 1.31% to 68.42 yuan per share, with a total market value of 370.4 billion.
In terms of tradable shareholders, the first quarterly report of LONGi shares in 2022 shows that "Super Niu San" and the former richest man in Fujian, Chen Fashu, newly acquired 950,000 shares, and the shares held by them accounted for 2.27% of the tradable share capital.
This is his second increase after adding about 210,000 new shares in the fourth quarter of last year.
It is worth mentioning that institutions are generally optimistic about the future development of LONGi shares, and have given "buy" and "recommended" ratings.
Cinda Securities believes that LONGi's leading position in photovoltaics is stable, and the new battery technology is expected to break through the boundaries.
It is estimated that the company's revenue from 2022 to 2024 will be 1248.64, 1337.63 and 161.115 billion yuan respectively, up 54.3%, 7.1% and 20.4% year-on-year; and 26.4%.
The current stock price corresponds to 26.96, 21.50, and 17.01 times the PE in 2022-2024, respectively, maintaining the "buy" rating.
Kaiyuan Securities stated that the short-term profit pressure will not change the leading character of LONGi shares, and the new technology will lay a foundation for long-term growth. It is expected that the company's net profit attributable to the parent in 2022-2024 is expected to reach 137.28 (-9.75)/172.17 (-16.38)/21.301 billion yuan, EPS They are 2.54/3.18/3.94 yuan/share, respectively, and the current price-earnings ratio of the stock price is 26.8/21.4/17.3 times, respectively, and the "buy" rating is maintained.
Ping An Securities pointed out that the photovoltaic industry is booming, and the company has core competitiveness in monocrystalline silicon wafers, cells, modules and other links, and is expected to continue to lead the development of the industry, maintaining the company's "recommended" rating.
Soochow Securities lowered its 2022/23 profit forecast based on the price of silicon materials that continued to exceed market expectations, and gave 35xPE in 2022, with a target price of 87.5 yuan, and maintained a “buy” rating.