The performance of Tongwei shares broke out as scheduled and continued to expand production to strengthen its leading position.

Recently, Tongwei shares announced that the net profit attributed to shareholders of listed companies in 2021 is expected to increase by 1.79 billion yuan to 1.99 billion yuan compared with the same period last year, an increase of 177% to 1970% over the same period last year, and it is expected that the net profit after deduction will increase by 18.41% to 2.041 billion yuan, an increase of 192% and 213% over the same period last year. The company pointed out that the business sectors of the company were operating steadily in the first half of 2021. Among them, high purity silicon business benefits from the growth of downstream demand, products are in short supply, market prices are significantly higher than the same period last year, and the company's high purity silicon business is full of production and sales, and profits have achieved substantial growth; in the special case of imbalance between supply and demand in the industrial chain, the company's battery business still maintained full production and full sales, and volume profits increased significantly compared with the same period last year.

It is reported that Tongwei shares are mainly engaged in agriculture and new energy, forming a business model of "agriculture (fishery) + photovoltaic" resource integration and coordinated development. In the aspect of new energy, the company focuses on the research and development, production and sales of products such as high-purity crystal silicon and solar cells, and is committed to the investment, construction, operation and maintenance of "fishing and light integration" terminal power station. According to the data by 2020, the company has formed an annual production capacity of 80, 000 tons of high-purity silicon and an annual production capacity of 27.5 GW of solar cells, of which the annual production capacity of single crystal cells is 24.5GW.

Guojin Securities pointed out that this year, silicon supply and demand is still scarce, price reduction space may be very limited, next year silicon supply and demand is not a serious surplus. Recently, it is a seasonal off-season of demand, but the expectation of an increase in installed capacity in the second half of the year is still strong. Considering that there is almost no new capacity release of silicon before the end of the year, and the capacity of silicon wafer is much larger than that of silicon, the price reduction space for silicon this year may be very limited, and the company's profit may be better than market expectations.

In addition, the company recently issued a notice on investing in a project with an annual output of 200000 tons of high-purity crystal silicon in Leshan City. The company plans to sign an Investment Agreement with the people's Government of Leshan City and the people's Government of Wutongqiao District of Leshan City. It plans to increase investment in the construction of an annual high-purity crystal silicon project of 200000 tons in Wutongqiao District of Leshan City, mainly engaged in research and development, production and sales of high-purity crystal silicon. The total investment of the project is expected to be 14 billion yuan. The project will be implemented in two phases according to 100000 tons per phase. The first phase of investment is expected to be 7 billion yuan, and it is planned to be put into production by the end of December 2022; the second phase of the project will be launched according to the market and the development of the photovoltaic industry.

Soochow Securities pointed out that Tongwei's expansion of 200000 tons of silicon will strengthen its leading position. By the end of 21 years and 22 years, the production capacity of the company will reach 18 and 330000 tons respectively, which is + 125% and + 83% compared with the same period last year. The company's silicon material will be expanded rapidly, and a long single lock material will be signed with Longji, Jingke, Jingao, Tianhe and other integrated leaders to guarantee shipment. the leading position is further strengthened.

For the future performance, Southwest Securities expects that the company will fully benefit from the high profitability brought about by the high price of silicon. In addition, the company's battery business continues to expand, and the company's performance will be guaranteed when the profitability of the battery industry reverses in the future. As the current silicon price remains high, we raise the company's annual profit in 2021 to 8 billion yuan, maintaining the "buy" rating.