Polysilicon new line steadily, with no fear of reversing annual results

August 14 TBEA announcement, the company owned subsidiary New Energy Co., Ltd. invested in the construction special  SUNGOLDPOWER photovoltaic industry recycling economy construction projects -1.2 tons of polysilicon project 2 * 35MW captive power plant has started normal heating, power generation, in-line equipment commissioning has been completed, three cold hydrogenation apparatus has been commissioning completed two devices have been produced, high-quality products 400 tons of polysilicon. The project is expected end of this year to achieve full production.

Comments:

New Line polysilicon progress in line with expectations, low cost significantly enhance performance flexibility. Power consumption of polysilicon production costs and depreciation accounting for nearly 50%. Company unique advantages of coal and captive power plant (tariff only 0.25 yuan / degrees, polysilicon integrated power consumption is expected to 100 kWh / kg), plus the cost of depreciation scale unit diluted benefits fully put into polysilicon production costs are expected to drop to 13-14 U.S. dollars / kg. In addition, the Ministry of Commerce on the U.S. and South Korea polysilicon preliminary anti-dumping and effective domestic production capacity, will result in a shortage of supply of polysilicon, the company is expected to increase its market share, and with the subsequent introduction of the New Deal photovoltaic electricity, grab the installation and start-distributed demand for polysilicon Pull will further push up the price, volume and price will work together to boost the performance of reverse polysilicon, 1.2 million tons production capacity is fully put into EPS is expected to thickening of about 0.1 million.

The whole industry chain model to enhance the PV market competitiveness and profitability. The company is the leading PV power plant EPC, the market share of about 10%, along with polysilicon, wafers, modules, power inverter with charger and supporting transformers, wire and cable production line almost the whole industry chain, with the formation of plant operations cost synergies, increased dramatically market competitiveness and profitability. In addition, the company invested about 2 billion this year, construction of 149MW photovoltaic power plants and BT 49.5MW wind farm projects in the second half is expected to begin shipping in succession.

Volume growth overseas projects are boosters. Overseas complete engineering has become the company's traditional core business net investment in the country to achieve steady growth in the context of another great leap to the sea, the company sufficient orders overseas projects, because the high level of profitability, the company has become an important source of profits. The first half of our engineering and construction business revenue grew 47%, gross margin improved 5.53 percentage points year on year, mainly is the contribution of overseas projects.

Growth will accelerate in the second half, the share price by multiple positive catalysis. The second half will be the company UHV projects, overseas projects, photovoltaic power plants to deliver peak performance is expected to accelerate the release. Meanwhile, the price of polysilicon, photovoltaic electricity Deal, VAT preferential half landing photovoltaic power plants, renewable energy tariff standards will continue to enhance the catalytic multiple positive share price.

Earnings forecasts and valuations. We expect 13-15 EPS were 0.52,0.64,0.77 yuan, the corresponding PE is 16,13,11 times. Maintain "prudent recommended" rating.