Incident: The company released its 2022 annual report and the first quarter report of 2023. The company achieved revenue of 1,636 million yuan in '22, +30.48% over the previous year; achieved net profit of 70 million yuan, +16.95% compared to the previous year; and achieved net profit of 66 million yuan after deducting non-net profit of 66 million yuan, +21.64% year-on-year. On a quarterly basis, 22Q4 achieved revenue of 514 million yuan, +53.89% year on year; achieved net profit of 20 million yuan to the mother, +33.33% year on year; and realized net profit deducted from non-net profit of 17 million yuan, +41.67% year on year. In 23Q1, the company achieved revenue of 430 million yuan, +30.82% year on year; net profit of the mother was 13 million yuan, -10.53% year on year; and realized non-net profit of 10 million yuan, or -23.95% year on year. Overall, the performance was in line with expectations.
The product matrix of welding tape is rich, and you can enjoy the iterative dividends of battery technology at the same time. Benefiting from the boom in the photovoltaic industry, welding belts are an important part of photovoltaic modules, and market demand is broad. The company seized the opportunity to increase the welding belt business, achieving revenue of 544 million yuan in '22, +100% year on year, with sales volume of 6149.86 tons, +167% year on year. The company has a rich photovoltaic welding belt product matrix. In addition to traditional photovoltaic welding belts, low temperature welding belts, SMBB welding belts, black welding belts, etc. have all been mass-produced and sold. The product is developing simultaneously with battery technology. In the short term, with advantages such as lower silver paste consumption and smaller shading area, SMBB welding tape is highly suited to the cost reduction and efficiency requirements of TopCon battery technology, which is expected to expand market share. In the medium term, low temperature welding tape technology can combine batteries with welding belts at low temperatures, effectively reducing battery fragmentation rate. It is suitable for HJT battery technology. With large-scale industrialization of HJT, low temperature welding belts will usher in a period of rapid development.
Strong entry into the energy storage business and building core advantages around customization. The company entered the energy storage business on the cutting edge, started building production capacity, achieved revenue of 72 million yuan in '22, quickly grabbed market share, and laid a solid foundation for subsequent large-scale development. In order to further enhance the product's ability to meet customized needs, the company developed and designed energy storage on the network source side in terms of AC/DC system integration. Among them, liquid cooling technology solutions for DC systems have progressed in stages and developed a series of AC system integration solutions. At the same time, portable energy storage products have successfully passed the testing and certification of international standards such as UL and FCC. Currently, the production capacity of the company's 5GWh energy storage system is under construction. After completion, the company's energy storage business will provide strong support for the company's performance.
We have been deeply involved in the bus line for many years, and our performance has steadily improved. As a leading domestic bus manufacturer, the company relies on high-quality, customized products that have been widely recognized by customers. The products are used in many national key projects such as the National Stadium and the Hong Kong-Zhuhai-Macao Bridge, and are sold to more than 40 countries and regions. In '22, the company's bus products achieved revenue of 769 million yuan, +24.33% year on year, providing stable support for the company's performance.
Equity incentives demonstrate determination to grow in the long term. The company launched a 22-year equity incentive plan and completed the first grant of 1,365 million shares, with 153 incentive targets. The plan will further establish and improve a long-term incentive mechanism, enhance the company's cohesion and competitiveness, and facilitate the company's long-term development.
Investment suggestions: The company's revenue for 23-25 is estimated to be 3174/49.16/6.777 billion yuan respectively, and the net profit of the mother is 16/301/471 million yuan respectively. The corresponding PE is 16/9/6. The company's bus business is developing steadily, and new energy businesses such as welding belts and energy storage are expected to increase the company's profits and maintain the “recommended” rating.
Risk warning: Downstream demand falls short of expectations, product development progress falls short of expectations, and market competition increases risks.