Who is the most energy-saving stock worth investing in the A-share market? According to the PEG (ie, the ratio of market earnings growth), Sanan Optoelectronics (600703.SH), which is known as the “A-share Messiâ€, is the most undervalued company among the 40 real energy-saving companies selected.
Sanan Optoelectronics' 2010 P/E ratio is 65.82, which calculates the company's PEG value of 0.62. Among the 40 energy-saving companies, only PEG is less than 1 company, and Sanan Optoelectronics has the lowest PEG value. A PEG of less than 1 indicates that the stock has a buying opportunity; a PEG equal to 0.5 indicates that there is a good opportunity to buy the stock, and a PEG value of 0.62 means that Sanan Optoelectronics currently has a good buying opportunity.
In fact, under the background of energy saving and emission reduction, Sanan Optoelectronics, which is the main LED chip, has been receiving much attention. In the secondary market, the stock rose by as much as 450% in 2009, and it is known as one of the most "cow" companies in China's "bull" year. 2010, although its share price leveled off, but in the case of the broader market fell about 16% of the full year, the company's full-year share price is still up nearly 70%.
In 2011, the goal of energy conservation and emission reduction is clearer and more powerful. Can Sanan Optoelectronics continue to create the “photoelectric myth†of the capital market?
High growth in the industry has just started
Sanan Optoelectronics' main business is distributed in the upstream of the LED industry chain, mainly engaged in chip epitaxial wafer production and chip manufacturing. At present, the company has become the largest LED production enterprise in China, and has laid LED production lines in many cities such as Tianjin and Wuhu. In 2009, it achieved sales income of 470 million yuan, net profit of 180 million yuan, and overall gross profit margin of 42%. The market share of domestic chip companies exceeded 20%.
After the company's listing on the backdoor, the company's profitability has increased year by year. In the first three quarters of 2010, the gross profit margin and net profit margin reached 45.92% and 45.47% respectively.
In recent years, the high growth of the LED industry has also become a strong push for the company's high performance. Publicly available data, with the promotion of LED applications, our LED chip market from between 2002 to 2008, six years from 2.8 billion to 1.9 billion yuan, an average annual increase of up to 37.6%.
But this is only the beginning stage of the LED industry. LEDs only complete the process from being recognized to being recognized. Two years ago, the industry generally estimated that with the advancement of technology and the continuous reduction of costs, the penetration rate of LED backlights in the next two years is expected to be 10% increased to 30%. The fact is that in the past year and a half, according to the Ovi Consulting survey, the penetration rate of LED backlight TV has reached 37%.
At the same time, LED backlight TV has surpassed industry expectations in just one year. The penetration rate of LED backlight TV retail sales has increased from 3.7% at the beginning of 2010 to 31.5% in October. Once LED general lighting is supported by the policy, the market space will be quickly opened. In the future, global LED will form a market scale of nearly one trillion yuan. As a leading LED chip company in China, Sanan Optoelectronics will undoubtedly enjoy the high growth of the entire industry.
The effect of government support is emerging. On December 4, 2010, Sanan Optoelectronics signed an agreement with Anhui Huainan Urban and Rural Construction Committee on the sales of LED application products with an amount of 450 million yuan. The Huainan Urban and Rural Construction Committee decided to purchase high-power LED street lamps from the company. By 2013, each purchase will be 150 million yuan.
Shortly after the signing of the large-value contract, Sanan Optoelectronics received another 200 million yuan from the government. Sanan Optoelectronics announced on December 24 that the wholly-owned subsidiary Anhui Sanan received a financial subsidy of 80 million yuan, and the subsidy will be fully included in the company's 2010 profit. On December 17, the company received 15 MOVCD equipment progress subsidies from the Wuhu Municipal Government of Anhui Province and a total of 125 million yuan for the equipment subsidies.
Four times capacity increased by 10 times
“I can be sure that by the end of 2011, the price of LED bulbs per watt will drop to US$1, which means that the LED lighting application market will expand rapidly.†This is the general manager of Sanan Optoelectronics, Lin Kezhen, in the third quarter of 2010. Regarding the media's position, he said that it is expected that LED lighting application products will bring more than 20 million yuan in revenue to Sanan Optoelectronics in 2010.
In fact, the current technology and market advantages of Sanan Optoelectronics are not at the level of LED lighting applications, but in LED chip manufacturing. However, Lin Kezhen said frankly that Sanan Optoelectronics has laid out production bases in Xiamen, Tianjin and Wuhu, Anhui. On the one hand, it is based on service customers and provides technical support nearby. On the other hand, it is based on the future development of LED lighting products. East China, North China and Central China have established production bases to significantly reduce logistics costs.
"What I am worried about now is that Sanan Optoelectronics' LED chip supply is not enough." Lin Kezhen is full of confidence in future expansion. Sanan Optoelectronics plans to complete the expansion of 107 MOCVD (LED chip production equipment) by the end of 2011. The number of the equipment is close to 150 units, achieving the industry's top five global targets.
Zhang Xiaofei, CEO of Gaogong LED Network, pointed out that if the number of MOCVD equipment of Sanan Optoelectronics increased to 150 units, the scale of LED chip production capacity will be second only to Taiwan's LED chip leading enterprise Jingdian, and Sanan Optoelectronics will focus on future development.
Locked in the LED lighting application market, mainly want to bring lower costs through vertical integration.
This coincides with Lin Kezhen’s previous views. “International lighting giants such as Philips and Osram are all in a comprehensive layout in the LED industry chain. This shows that only vertical integration can have a greater role in the LED industry, otherwise it will be fundamental. Can't compete with international giants."
The bigger goal of Sanan Optoelectronics is to expand its production capacity by 10 times in four years.
As early as February 2009, Sanan Optoelectronics announced that it plans to issue no more than 50 million shares, and the net proceeds raised will not exceed 800 million yuan. It will be used by the company to build another Sanan Optoelectronics in Tianjin. The investment is about 1 billion yuan. At present, Tianjin Sanan has completed equipment commissioning, and personnel support and training work has also been completed. After the production, Sanan Optoelectronics LED production capacity doubled.
On September 15, 2010, Sanan Optoelectronics issued a non-public offering of 106 million shares and was approved by the China Securities Regulatory Commission. The funds raised will continue to be used to expand LED production capacity and concentrating solar energy business. After the 3 billion yuan raised funds into the 12 billion yuan LED chip project strongly supported by the Wuhu Municipal Government, the production capacity of Sanan Optoelectronics will be expanded 10 times in the next four years.
Under the market conditions of LED epitaxial wafers and increasing demand for chips, the company's 2010 revenue is expected to exceed 1 billion yuan.
Photovoltaic projects are progressing steadily
In addition to the ready-to-go LED chips and LED lighting applications, Sanan Optoelectronics' solar PV projects are also progressing in an orderly manner, and this business is expected to become a bright spot for the company's mid- and long-term performance growth.
It was learned from Sanan Optoelectronics that the demonstration project of the concentrating solar photovoltaic power station that the company cooperated with Qinghai Electric Power Company had completed the installation and commissioning of 1MW and started grid-connected power generation. The 3MW project is expected to be completed in the first half of 2011. Based on the successful experience of 3MW in the future, the company will implement the 15MW project by replicating the 3MW project.
In addition, the company and the United States EMCORE Corporation to establish a joint venture company Sanke Photovoltaic Co., Ltd., will be mainly engaged in the design and development of ground high-concentration solar energy applications (HCPV) components and systems. Sanke Photovoltaic has a registered capital of 30 million US dollars, of which Sanan Optoelectronics has invested 18 million US dollars, accounting for 60% of the share capital.
In terms of technical cooperation, EC will license the intellectual property and know-how related to the design, manufacture and testing process of HCPV receivers, modules and systems for terrestrial solar applications owned by EC. Sanan Optoelectronics will contribute its own ground. Intellectual property and know-how of high-concentration solar power HCPV components and systems.
Guosen Securities report pointed out that the industrialization process of concentrating solar energy projects is closely related to the support of national industrial policies, and considering the three aspects of technology accumulation, project operation and policy time, “we believe that the large-scale implementation of concentrating solar energy industrialization still needs to go through In 3 to 5 years, the solar energy project is expected to become an important growth point for the company's performance."
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