Zhitong Financial APP learned that CICC issued a research report saying that Skyworth Group (00751) "outperform industry" rating was maintained, and the profit forecast for 2022-24 remained unchanged. Its home appliance business is expected to recover in 2023. It is optimistic about the certainty of high profits in the photovoltaic business against the background of downward component prices. The target price will be raised by 29% to HK $6.69, which is 38% higher than the current share price. The company's photovoltaic business has developed rapidly in 2021 and 2022, and has grown into an important leader of the household photovoltaic track.
The main points of CICC are as follows:
With the decline in component prices, the company's photovoltaic business profit growth has a strong certainty.
1) as of January 6, silicon materials, wafers, batteries and modules fell by 41%, 47%, 40% and 7% respectively from their previous highs, according to PVInfolink data. Upstream price reduction to stimulate installation, the bank believes that household photovoltaic enterprise income growth and profitability improvement in 2023 at least one may exceed expectations, so the certainty of high profits is strong. In 2022, Skyworth will give more profits to consumers in the context of rising component prices, and profitability will have more flexibility in the context of falling component prices.
Household channels have invisible barriers, and business model innovation is conducive to quantity.
1) 1-3Q2022 Skyworth Group realized photovoltaic business income of 7.821 billion yuan (year-on-year + 257%) (mainly household income), far exceeding the installation growth rate of household industry, and the company is involved in industrial and commercial photovoltaic business, opening up incremental space for future business.
2) the bank believes that Skyworth's home appliance management concept has brought the channel efficiency and cost control ability into full play in the process of household business promotion. The common management methods of home appliance enterprises-digital management and supply chain management have been fully applied to the development of the market.
3) the superficial threshold of the household industry is low, but the actual test is the comprehensive channel control and product competitiveness of the enterprise, and there are hidden barriers built in the channel. The bank estimates that the household market CR3 has increased from less than 40 per cent in 2021 to 70 per cent in 2022, with a comprehensive channel layout with a natural first-mover advantage. Skyworth's channel model is vertical management to county and town-level agents, there is no intermediate level, channel efficiency has obvious advantages.
4) at present, the Venture Household Photovoltaic business mainly implements the 22-year operating lease model, which has no debt risk and high acceptance, which is conducive to promotion, and there is no capital turnover pressure in the light asset model.
Home appliance business recovers growth, Skyworth digital growth potential is greater.
1) in 2023, under the background of the recovery of consumption and the gradual elimination of overseas inventory, Skyworth home appliance business is expected to achieve restorative growth, panel prices are low, and the profitability of TV business is relatively high. 2) Skyworth Digital, a subsidiary, has high growth potential in broadband and VR business, and the bank is optimistic about Skyworth's efforts in new categories in the digital intelligent terminal industry chain.