The current situation of the company
Recently, we have invited the company to participate in the CICC Strategy meeting to exchange views on the company's development prospects. We believe that the company has plenty of orders on hand, and its profitability is expected to continue to improve under the scale effect. at the same time, it is expected to actively expand new areas of laser applications and create a new growth curve. The specific views are updated as follows:
Comment
The scale effect is highlighted, and the profit center is upward. According to the company's performance forecast, the company expects 2022 revenue of 4.106 billion yuan, year-on-year + 107%; estimated return net profit of 370-396 million yuan, year-on-year + 239% Muoi 262%; net interest rate of about 9.0% Mak 9.6%, year-on-year + 4ppt. If we deduct the impact of share payment, we judge that the company's net interest rate may return to more than 10%. The company's forecast results exceeded our expectations, mainly due to a faster-than-expected increase in profit margins under economies of scale. Looking forward, as the scale effect of the company continues to highlight, the expense rate still has room to decline during the period, and we judge that the net interest rate is expected to continue to be optimized in 2023.
There are plenty of orders on hand, supporting the rapid growth of performance. According to the company announcement, by the end of 2022, new orders signed by the company were about 7.7 billion yuan (including tax), an increase of about 35 percent over the same period last year, while existing orders were about 8.1 billion yuan (including tax), an increase of about 59 percent over the same period last year. Based on the overall revenue recognition cycle of about one year, we expect the company's revenue to continue to grow rapidly in 2023. From the split of the order structure, we estimate that nearly 90% of them come from the field of lithium electricity, and the rest from consumer electronics, sheet metal cutting, photovoltaic and other fields.
Lithium + photovoltaic two-wheel drive development, R & D layout of new products, reserve growth momentum. Looking forward, we think that the overseas market and energy storage market of lithium electricity field are expected to become a new starting point. At the same time, the company expands new product lines such as shearing all-in-one machine and module Pack assembly, and the single-line value may be increased. The company expects that orders in lithium electricity field will continue to grow to a certain extent in 2023. The expansion of new photovoltaic cells will continue, we judge that the demand for TOPCon expansion in 2023 is about 150~200GW, the company as the leader of TOPCon laser SE equipment, may benefit from the industry demand growth, in addition, based on the deep understanding of laser underlying technology, expand other routes of new products, medium-and long-term may be expected to contribute to performance.
Profit forecast and valuation
Taking into account the prominent economies of scale and the improvement in profitability, we raised the net profit of 2022 by 11.1% to 384 million yuan / 770 million yuan in 2023, and introduced the profit forecast for 2024, corresponding to a net profit of 1.126 billion yuan in 2024. The current share price corresponds to a price-to-earnings ratio of 17.1 times 2024 / 11.7 times earnings. Taking into account the decline in industry valuation, we maintain the company's outperform industry rating and 97.60 yuan list price, corresponding to 25.6 times price-to-earnings ratio in 2023, which has 49.7% upside compared to the current stock price.
Risk
The progress of order fulfillment is not as expected; the expansion of new product line is not as expected; the production expansion plan of downstream customers is not as expected; and the risk of decline in gross profit margin is caused by intensified market competition.