On April 10, the A-share market saw a notable performance in the new energy sector, with Tongwei Co., Ltd. (stock code: 600438) closing at 17.47 yuan, an increase of 1.57%. The company’s latest price-to-book ratio stands at 1.59, and its total market capitalization has reached 78.65 billion yuan. This performance not only outperformed the broader market but also distinguished itself within the new energy sector, attracting significant market attention.
As a key national enterprise in agricultural industrialization, Tongwei Co., Ltd. has been actively expanding its presence in the new energy field in recent years, establishing a dual-driven business model focusing on aquaculture feed and photovoltaic new energy. The company is not only the largest producer of aquaculture feed in China but also holds a vital position in the upstream photovoltaic industry chain, with its high-purity silicon and solar cell products enjoying a competitive edge in the market.
According to the institutional holdings data, as of the third quarter report of 2024, 772 institutions hold shares in Tongwei Co., Ltd., including 772 funds with a total shareholding of 55.64 million shares and a market value of 12.30 billion yuan. This data reflects the recognition of professional investors regarding the company’s future growth prospects.
Despite the third quarter report of 2024 indicating that the company achieved an operating revenue of 68.27 billion yuan, a year-on-year decrease of 38.73%, and a net profit of -3.973 billion yuan, down 124.37% year-on-year, these results are primarily attributed to cyclical fluctuations within the industry. Notably, the company’s gross profit margin remains at 7.76%, demonstrating strong cost control capabilities.
From a valuation perspective, Tongwei Co., Ltd. currently has a trailing price-to-earnings ratio (TTM) of -11.74, a static PE of 5.79, and a price-to-book ratio of 1.59, all significantly lower than the industry average. Compared to its peers, Tongwei Co., Ltd. showcases a clear valuation advantage. For instance, JinkoSolar has a price-to-book ratio of 1.08, while GoodWe boasts a high ratio of 3.72, positioning Tongwei Co., Ltd. at a relatively reasonable valuation level.
The new energy sector, recognized as a national strategic emerging industry, has promising long-term growth potential. With the ongoing advancement of the “dual carbon” goals, the photovoltaic industry chain is expected to experience a new wave of development opportunities. Tongwei Co., Ltd.‘s strategic positioning in the upstream photovoltaic sector, particularly its leadership in high-purity silicon, provides a solid foundation for the company’s future growth.
Technically, Tongwei Co., Ltd.‘s recent stock price has fluctuated between 16.50 yuan and 18.00 yuan, with a moderate increase in trading volume, indicating rising market interest in the stock. The MACD indicator displays a bullish crossover, suggesting a positive short-term technical outlook.
For investors, while exploring opportunities in Tongwei Co., Ltd., it is also essential to be aware of associated risks. First, the photovoltaic industry’s cyclical nature may result in price fluctuations impacting the company’s performance. Additionally, intensifying industry competition could pressure profit margins. Lastly, changes in the international trade environment may introduce uncertainties for export operations.
Looking ahead, as the photovoltaic industry rebounds, Tongwei Co., Ltd. is well-positioned to leverage its comprehensive industry chain and technical advantages to secure a favorable competitive stance in the market. For long-term investors, the current valuation levels may present a compelling investment opportunity.
It is important to note that the views expressed herein are for informational purposes only and do not constitute investment advice. Investors should carefully consider their risk tolerance and investment objectives when making decisions. Stock markets carry risks, and caution is advised in investing.
