Polysilicon TBEA profit model is optimistic

TBEA (600089) currently has a complete industrial chain from coal to captive power plants to polysilicon, and one of the important costs of polysilicon is electrical energy. The company's electric energy cost has greater advantages than other domestic manufacturers, and the scale of 12,000 tons is also very low in China. It is expected that the comprehensive cost of the company's 12,000 tons polysilicon production line will have great advantages over domestic manufacturers, and it can be controlled within 15 US dollars/kg. s level. According to our estimation, if the full cost drops to the level of US$15/kg, according to the current price level, it is expected that the polysilicon project will contribute approximately 200 million yuan to the company’s performance.

Although the company's main business transformers and wires and cables have limited growth prospects, they can basically maintain stability and provide sufficient cash flow for the development of the company's photovoltaic business. At present, the cost and selling price of domestic polysilicon are basically the same, even exceeding the selling price level. Many manufacturers are in the state of suspending production. Most photovoltaic companies are only involved in the photovoltaic industry. Due to the limited capital flow, they are more likely to withdraw early. Such companies as variable electricians with strong traditional businesses that provide cash flow support have great competitive advantages and can support it until the end.

As the leading power plant development in China, TBEA has an outstanding location advantage and is expected to benefit from the formal launch of the domestic market to a greater extent. According to our simple statistics, in the first half of the year, the company received 218.5MW of photovoltaic power plants, and it is expected to invest about 2.5 billion yuan. Assuming that they are all based on the BT model, they are expected to contribute about 250 million yuan in profits based on a profit rate of around 10%. We believe that the company's investment in photovoltaic power plants has only just begun. With the implementation of a series of distributed and subsidy policies for photovoltaic substations in the country, the domestic market for photovoltaic power plants will develop rapidly in the future, as the Xinjiang region is one of the regions with the most abundant solar energy in China. The company will have great regional advantages.

We expect the company's 2013-2014 earnings per share to be 0.50 yuan and 0.62 yuan, respectively, corresponding to the current price-earnings ratio of 16 times, 13 times, the company's traditional business is basically stable, photovoltaic business is gradually stabilized, but the company's polysilicon business has a Strong cost advantage is expected to be profitable, and once the model is verified, the company is expected to continue to expand and comprehensively consider the investment rating we have given to the company's stocks to “overweight”.