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    Analysis of the value of investment in convertible bonds: reducing the cost of production and expanding the market

    2019-03-14 11:41:37

    Research on Xingzheng Solid Income Zuo Dayong, Huang Weiping

    Investment points

    Tongwei Convertible BondThe lower revision clause triggers relatively high requirementsThe value of pure debt is about 88.76 yuan, and the face value corresponds to YTM of 2.50%.The debt protection is better.

    As of the close of March 13, the corresponding parity of Tongwei Convertible Bonds was 101.53 yuan. Tongwei Convertible Bonds is an AA+ variety that has been recognized as a fundamentally large-scale, and the recent attention of the PV sector is also high. Statically, it is expected that the conversion premium rate obtained on the first day of the listing of Tongwei Convertible Bonds at the current parity is within the range of 16%-20%, and the price is118-122 yuan.

    The size of Tongwei Convertible Bonds left to the market may be around 2 billion yuan (40%).The expected success rate is about 0.023%-0.029%. For investors, although the equity market has signs of volatility, the chances of participating in new revenue gains are still relatively certain.Tongwei sharesA solid enough foundation can also provide protection.The recent decline in the relative amount of offline participation by new investors is a feature that will increase the winning rate. Tongwei shares in the secondary market are popular varieties and are worthy of attention. Of course, if the recent market adjustments and the lifting of the ban on stocks lead to a decline in stock prices, it should be a good low-slow opportunity, as is Tongwei’s convertible bonds.

    Tongwei's main business includes photovoltaic (polysilicon,Solar energyCell sheet) and feed: polysilicon currently has a capacity of about 70,000 tons.Cost advantage is very significantThe solar cell has a leading position, the existing capacity is 5.4GW, and the capacity utilization rate has remained above 100% for a long time.Overall, the PV industry is expected to correct, "the darkest moment" has passed, and the fundamentals and policies have improved.Feed business 2018H1 revenue accounted for about 49%, providing stable performance and cash flow.

    The company's 18H1 realized operating income/net return net profit of 124.61/919 million yuan, a year-on-year increase of 12.24% / 16.14%. “531 New Deal” had little impact on the company's performance in the first half of the year. During the reporting period, the company's polysilicon sales volume was 0.87 million tons, up 6.73% year-on-year; battery production and sales volume was about 3GW, ranking first in the world, up 60% year-on-year. decline,The slowdown in revenue and net profit growth may be related to the expansion of capacity.The performance forecast shows that the company achieved a net profit of 20.12-21.13 billion yuan in 2018, a year-on-year increase of 0%-5%.The non-net profit of the deduction was 18.64-20.60 billion yuan, a year-on-year change of -5%-5%, in line with market expectations.In the second half of the year, the performance of PV industry companies began to show the negative impact of the policy, and the operating rate generally fell below 70%. However, the company's polysilicon and solar panel panels still maintained full production, and strong cost control ability can also guarantee product gross profit margin.

    Risk warning: PV installation is not as expected, PV product prices fluctuate greatly, and international trade frictions are intensified.

    Hot searchAnalysis of the Value of Tongwei Convertible Bond Investment

    Editor in charge: Robot RF13015

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