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Meichang Co., Ltd.: The company is a leading diamond cutting enterprise. Diamond cutting wire is used in the silicon wafer cutting link in the photovoltaic industry chain. Since 2015, the penetration rate has increased rapidly and market demand has grown rapidly. Relying on its production capacity and cost advantages, the company has reached cooperative relationships with many photovoltaic giants, and its sales have grown rapidly year by year. In 2019, the company's diamond wire sales accounted for more than 50% of the global market, firmly occupying the leading position in the industry.
Highlights:
The era of photovoltaic grid parity has arrived, and the demand for diamonds has increased
my country’s newly installed photovoltaic capacity has surpassed Germany since 2013, becoming the first in the world Large photovoltaic application market. In the first half of 2020, under the influence of the epidemic, my country's newly installed photovoltaic capacity bucked the trend and achieved a positive growth of 1.05%. Driven by the rapid advancement of industrial technology, the photovoltaic industry has officially entered the transitional stage of grid parity.
According to CPIA estimates, under an optimistic scenario, the compound growth rate of new global photovoltaic installed capacity will reach 11.7% from 2019 to 2025. According to 19 years, each silicon wafer (5W) will consume 1.5 meters of electroplated diamond. Later, as the silicon wafer increases and the diameter of the diamond wire decreases, assuming that each silicon wafer increases by 0.5W per year, the wire consumption will increase by 0.2m. It is estimated that the diamond wire market demand will reach 3709/5067/63 million kilometers in 2020/2021/2022, with year-on-year growth rates of 7.51%/36.6%/24.34% respectively.
The proportion of monocrystalline silicon wafers continues to increase, and the company’s alliance with Longi has broad prospects
In 2019, the market share of monocrystalline silicon wafers surpassed that of polycrystalline silicon wafers, from 19.5% in 2016 to 2019. In just three years, it rose to 65% in 2019, and the share further increased in 2020H1. As the leader in monocrystalline silicon, LONGi is the company's largest customer. It has developed rapidly in the past two years, accounting for 47.28% of its revenue in 2019. The company is expected to grow rapidly with the development of the photovoltaic industry and LONGi. At the same time, the increase in the concentration of the upstream silicon wafer industry will also drive a further increase in the concentration of the diamond wire industry.
The company’s production costs are significantly lower than those of comparable companies, and its profitability and financial status are better than those of its peers
Under the trend of parity, all links in the photovoltaic industry chain have been facing price reduction pressure for a long time. In 2019, many companies Comparable companies have already suffered losses, and the industry is facing a reshuffle. Cost control capabilities are key. The company's "single machine and six lines" production capacity is significantly ahead of comparable companies, taking the lead in forming a scale advantage. At the same time, the company continues to reduce costs by extending to upstream areas and optimizing the production process.
In 2019, the company’s unit main business cost was 29.5 yuan/km, while that of comparable companies during the same period was 69.79 yuan/km. The company's financial indicators such as gross profit margin, net profit, and asset-liability ratio are also far better than those of comparable companies, and it is expected to stand out in the industry reshuffle.
The diversified applications of diamond wire have great room for imagination
The company attaches great importance to R&D investment and continues to develop in the directions of thin wire, fast cutting, wire saving, and high cutting stability. progress. In 2019, the company's 50-micron products accounted for 22.34%. At the same time, the company is actively researching and testing the application of diamond wire in the cutting fields of hard and brittle materials such as precision ceramics and magnetic materials, as well as in the field of building materials. It has now entered the small batch shipment stage or pilot trial. In the future, the application field of diamond cutting wire is expected to expand and open up new fields. market space.
CITIC Construction Investment expects the company’s net profit attributable to the parent company to reach 465, 606 and 723 million yuan respectively from 2020 to 2022, giving it an “overweight” rating.
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