Description of the event

The company released its 2022 annual report, which achieved annual revenue of 4.868 billion yuan, an increase of 19.14%; achieved net profit of 302 million yuan, an increase of 107.04%; and achieved net profit of 283 million yuan after deducting non-return mother's net profit, an increase of 112.01%. The company released its report for the first quarter of 2023. Q1 achieved revenue of 1,327 million yuan, an increase of 28.01%; achieved net profit of 53 million yuan, an increase of 61.49%; and achieved net profit of 48 million yuan after deducting non-return mother's net profit, an increase of 67.86%.

Incident reviews

Automated PV/battery production lines are the main source of revenue growth, and the PV sector has plenty of on-hand orders. By product, automated PV/packaging/battery production lines achieved revenue of 32.60/6.82/350 million yuan respectively in 2022, with year-on-year growth rates of 46.44%/-27.41%/102.48% respectively. Meanwhile, by the end of 2022, the company's PV sector had on-hand orders of 5.444 billion yuan, an increase of 45.56% over the previous year.

Gross margin increased year over year, and expenses were properly managed. The gross margin for the full year of 2022 increased by 1.84pct to 21.47%, and the cost rate for the period decreased by 1.49pct to 13.08%, of which the sales expenses rate also decreased by 0.18pct to 3.31%; the management expense ratio decreased by 0.25pct to 4.91%; the R&D expenses rate increased 0.71 pct to 5.46%; and the financial expense ratio decreased 1.77pct to -0.61%.

There was a decrease in operating cash flow. The company's net operating cash inflow for the year was 250 million yuan, a year-on-year decrease of 392 million yuan. The main reason was the increase in the company's sales orders this year and the increase in cash to purchase products and receive labor payments. The payout ratio increased by 8.61 pct and 25.13 pct to 88.83% and 87.69% respectively.

The perovskite layout is ahead of schedule, and actual products are already being sold. The company invested nearly 100 million yuan to build an efficient perovskite solar cell experimental center to conduct process research on large-scale glass-based trans-structured perovskite batteries and silicon-based perovskite laminated batteries. It has completed the construction of a complete large-scale single-junction perovskite battery pilot line and crystalline silicon perovskite laminated battery test line, and is equipped with complete, high-performance precision testing instruments. Currently, the company provides MW grade perovskite and overall solutions, and provides GW grade perovskite mass production equipment output and technical support.

The photovoltaic equipment product matrix continues to break through, and is expected to usher in volume release. On the HJT side, the company can provide process equipment such as lint making, cleaning, electroplating and metallization equipment and related automation equipment; the company's first HJT heterojunction cleaning and velvet making equipment has been successfully delivered and verified by customers, and received orders for 4GW cleaning and velvet cleaning equipment, pre-cleaning equipment, and etching cleaning equipment at the end of 2022. In terms of TopCon, the company can provide TOPCON battery PECVD & PVD coating equipment, process equipment such as velvet making and cleaning, and related automation equipment. The first TopCon technology 2-in-1 coating equipment has been successfully delivered.

Profit forecasting and valuation

It is estimated that in 2023-2025, the company's operating income will be 61.38/74.19/8.630 billion, respectively, with a year-on-year growth rate of 26.10%/20.87%/16.32% respectively; the net profit of the mother is 438/555/694 million yuan respectively, with a year-on-year growth rate of 45.04%/28.98%/22.86% respectively. Looking at the valuations of comparable companies in the same industry for the next two years, Jingshan Light Machinery is at a low level. The company's 2023-2024 performance corresponding to PE was 27.71/21.48 times, respectively. It was covered for the first time, giving it an “increase in holdings” rating.

Risk warning

The perovskite project fell short of expectations; sales of photovoltaic equipment fell short of expectations; profit forecasts and valuations fell short of expectations