TONGWEI CO.,LTD(600438) 长江证券·2024-11-12 06:36Investment Rating - The investment rating for Tongwei Co Ltd (600438 SH) is Buy and is maintained [3] Core Views - Tongwei Co Ltd reported a significant reduction in losses in Q3 2024, with silicon material operating cash flow turning positive [1][4] - Revenue for the first three quarters of 2024 was RMB 68 272 billion, a year-on-year decrease of 38 73% Net profit attributable to the parent company was RMB -3 973 billion, a year-on-year decrease of 124 37% [4] - In Q3 2024, revenue was RMB 24 475 billion, a year-on-year decrease of 34 47%, but a quarter-on-quarter increase of 1 03% Net profit attributable to the parent company was RMB -844 million, a year-on-year decrease of 127 84%, but with a reduction in losses compared to the previous quarter [4] - The company's silicon material business saw improved cost optimization due to lower electricity prices during the wet season, reduced industrial silicon prices, and the completion of capacity ramp-up in Yunnan [4] - The battery segment experienced further losses due to PERC and large-size capacity ramp-up, while the module segment remained roughly breakeven [4] - The company's management capabilities were highlighted, with a period expense ratio of 11 27% in Q3 2024 and a significant improvement in operating cash flow to RMB 2 988 billion [4] Financial Data and Forecasts - For 2024, the company is expected to achieve revenue of RMB 88 345 billion, a significant decrease from RMB 139 104 billion in 2023 [9] - Net profit attributable to the parent company is forecasted to be RMB -4 956 billion in 2024, compared to RMB 13 574 billion in 2023 [9] - The company's EPS is expected to be RMB -1 10 in 2024, recovering to RMB 1 11 in 2025 and RMB 1 62 in 2026 [9] - Operating cash flow is projected to improve significantly, from RMB 5 241 billion in 2024 to RMB 11 574 billion in 2026 [9] Future Outlook - The company is focusing on increasing the proportion of N-type silicon material shipments while pursuing cost reductions, with unit power consumption already below 50 kWh and silicon consumption below 1 04 kg/Kg-Si [5] - By the end of 2024, the company's TNC capacity is expected to exceed 100 GW, with TOPCon battery profitability expected to recover as module production increases and large-size products are gradually introduced [5] - The company is also innovating in HJT technology, which could potentially break the industry's overcapacity situation [5] - The module business continues to grow rapidly, with the company ranking on the BNEF Tier 1 photovoltaic module manufacturer list and expanding its overseas market presence [5] Market Performance - The current stock price is RMB 29 91, with a total market capitalization of RMB 450 198 million [6] - Over the past 12 months, the stock has underperformed the CSI 300 index, with a decline of 37% compared to the index's 18% decline [7]