[SMM report] Huitian Xincai wholly-owned subsidiary plans to invest 20.03 million yuan to expand the photovoltaic silicone gel project to continuously strengthen market development.

On June 4, Huitian New Materials announced that Shanghai Huitian New Materials Co., Ltd., a wholly owned subsidiary of the company, planned to invest 20.03 million yuan to build an annual photovoltaic one-component silicone sealant project with an annual production capacity of 30, 000 tons. After the new production line is completed and put into production, the photovoltaic one-component silicone gel production capacity of Shanghai Huitian will increase by more than 59%.

The purpose of this project investment is to further improve the market share and technical level of the company's adhesive products in the new energy field, enhance the dominant position in the industry, and improve the company's production capacity layout.

In 2020, the photovoltaic market still maintained a momentum of growth, and the global photovoltaic installed capacity of 130 GW, increased by 13% compared with the same period last year. Among them, China continues to lead the development of the global photovoltaic market. It is predicted that the new installed capacity of the world will reach 150GW in 2021, the installed scale of China will be 55-65GW, and the average annual installed scale of photovoltaic will be 70-90GW in the "14th five-year Plan". Since the 14th five-year Plan, China has put forward the development goal of "carbon peak" and "carbon neutralization", and the photovoltaic market has been further promoted and developed. Countries have increased investment in the photovoltaic industry, vigorously found that photovoltaic and other new energy industry, transition to a green economy, renewable energy, especially photovoltaic power generation is becoming an important direction of energy structure reform.

With the continuous improvement of photovoltaic technology, the continuous improvement of conversion efficiency and the decline of cost, the photovoltaic industry in China has changed from high-speed development to high-quality development, from relying on policy subsidies to market-driven, and the degree of industrial concentration has increased continuously. head enterprises accelerate production expansion, backward production capacity and accelerated withdrawal of second-and third-tier small factories, market space is further expanded, industry growth is prominent. Adhesive is one of the important auxiliary materials in the photovoltaic industry. Huitian, as a leading domestic photovoltaic adhesive enterprise, the sustained and healthy development of the new energy industry will bring a broader market space for the company's products.

It is reported that the annual production capacity of one-component and two-component photovoltaic silicone glue in Shanghai Huitian is about 50700 tons and 10,000 tons respectively. With the continuous expansion of the company's adhesive sales scale in the new energy industry at home and abroad, the company's existing photovoltaic one-component silicone gel production capacity is expected to be insufficient to meet the growing supply demand in the future. This investment can effectively alleviate the tight supply situation in the market in the next 1-2 years.

Huitian Xincai has been focusing on high-end application areas, seizing industry development opportunities, in-depth promotion of major customer cooperation, has achieved Huawei, Ningde era and other strategic customers formal supplier qualification, key customer share increased. In the first quarterly report of 2021 released by the company, the company realized operating income of 725 million yuan in the first quarter of 2021, an increase of 40.14% over the same period last year, while the net profit belonging to shareholders of listed companies was 76 million yuan, up 35.71% from the same period last year. With the rapid development of the photovoltaic market and the company's continuous strengthening of market development, it is expected that Huitian new materials still have a lot of room for development.