occurrences

The company released the third quarter report of 2022

The company's Q3 revenue was 235 million yuan, +0.15% year on year, -31% month on month; net profit returned to the mother/net profit was 0.24/20 million yuan, -36.3%/-45.0% year on year, -39.2%/-38.4% month on month. Revenue for the first three quarters was 719 million yuan, +28.2% year on year, and the net profit returned to/after deducting non-net profit was 0.80/067 million yuan, +2.15%/+6.63% year on year.

Brief review

Q3 revenue declined month-on-month due to the pandemic

The company's Q3 delivery progress was affected by the Shandong epidemic in the third quarter, causing revenue to fall short of expectations.

There were many outbreaks in Shandong in the third quarter. The company's production and sales were affected to a certain extent. Although there were reissues at the end of the quarter, they were unable to complete them.

There has been a recovery in gross margin

Q3 The company's gross sales margin was 28.6%, up 3.1pct from the previous month, indicating that the company's profitability has begun to improve. The company's SVG products account for about half of its revenue. The past year was in a fierce price war, and the unit price dropped 40+% compared to the same period last year. Market participants have begun to be eliminated under fierce competition. It is expected that with continued cost reduction and the easing of the price war, SVG's gross margin will recover, prompting the company to recover its profitability.

Energy storage is on the rise and has become an important growth point for the company

The company is expanding the energy storage system integration business based on PCS. The company's energy storage order target this year is 4-5 billion, mostly energy storage integration projects. The company has 35kV, 10kV high voltage cascades, 1500V medium voltage and 400V low voltage PCS products.

The order source is guaranteed, and I'm optimistic about the growth potential

In June of this year, the controlling shareholder of the company became Shandong Energy Group Renewable Energy Co., Ltd. The parent company is expected to bring more new energy projects to the company and deepen cooperation between the two.

Profit Forecast: Maintaining the “Increase in Holding” Rating

The company's orders continued to increase, and new energy storage orders exceeded expectations. Based on the explosion of PCS energy storage integration, the company's performance in 2022, 2023, and 2024 is expected to be 154, 249, and 394, respectively.

Risk warning

The epidemic has repeatedly caused the company's delivery and confirmation revenue to be blocked; the gross margin of SVG products continues to be low; IGBT supply is tight and prices have risen, causing the company's SVG and PCS production to be blocked and delivery fell short of expectations; new installations of new energy sources such as photovoltaics and wind power fell short of expectations, causing the company's demand for SVG and other equipment to fall short of expectations; demand for energy storage fell short of expectations; demand for energy storage fell short of expectations; demand for energy storage fell short of expectations; low margins in the energy storage business caused the company's overall gross margin to fall short of expectations; low margins in the energy storage business caused the company's overall gross margin to fall short of expectations; low margins in the energy storage business caused the company's overall gross margin to fall short of expectations; low margins in the energy storage business caused the company's overall gross margin to fall short of expectations; low margins in the energy storage business caused the company's overall gross margin to fall short of expectations; low margins in the energy storage business caused the company's overall gross margin to fall short of expectations; low margins in the energy storage business caused the company Higher cell prices lead to profitability Decline; competition for energy storage PCS intensifies; domestic demand for large-scale power plants is slowing down; demand for rail transit construction is slowing down, etc.