The performance was in line with expectations, and the impact of the epidemic gradually abated

According to Company Express, in 2022, the company achieved operating income of 1,297 million yuan, an increase of 37.61%; net profit returned to the mother was 125 million yuan, an increase of 7.29%; after deducting non-net profit of 108 million yuan, an increase of 16.16%. In response to 2022 Q4, operating income was 578 million yuan, an increase of 51%, an increase of 146%; net profit of the mother was 45 million yuan, an increase of 18% over the same period, an increase of 90% over the same period. It can be seen that the impact of the epidemic on the company in the third quarter has subsided. The fourth quarter's performance improved significantly compared to the third quarter. The company's overall operation was relatively steady, and development continued to improve.

Domestic big reserves are on the rise, waiting for the energy storage business to expand

Recently, favorable policies related to energy storage have continued to be introduced, and the National Development and Reform Commission has proposed that it will actively arrange investment within the central budget to support the construction of an innovative platform for integrating production and education in national energy storage technology. At the same time, with the gradual commissioning of related battery production capacity and the continuous decline in the price of lithium salt as a raw material, it is expected that the cost pressure of energy storage systems in 2023 will be significantly alleviated. Looking at it now, the average price of a 2-hour energy storage system in January 2023 has dropped 9.82% month-on-month. According to energy storage and electricity market estimates, the domestic large storage market will continue to double in 2023, and the new installed capacity is expected to reach 41.1 GWH. We anticipate that the company's energy storage business is expected to fully benefit. Combined with the empowerment of shareholders, the company's energy storage business is expected to contribute significantly.

Profit forecasting

Considering that the company's operations in the second half of the year were affected by the epidemic, the company's profit forecast was appropriately lowered. The company's revenue for 2022-2024 was 12.97, 23.27, and 3,564 billion yuan respectively, and EPS was 0.89, 1.48, and 2.13 yuan respectively. The current stock price corresponding to PE was 46, 27, and 19 times, respectively, maintaining the “buy” investment rating.

Risk warning

Risks such as the risk of fluctuations in raw material prices, too intense competition in the energy storage industry, the promotion of high-voltage cascade technology falling short of expectations, and the development of the new energy business falling short of expectations.