002056.SZ in Hengdian issued a half-year performance forecast for 2023, and the company expects to achieve a net profit of 11.80-1.26 billion yuan, which is expected to be deducted from non-net profit of 11.94-1.26 billion yuan, or + 80%, 90% compared with the same period last year.

Split:

Photovoltaic industry: from the perspective of the second quarter, the company is expected to ship 1.7GW components in the second quarter, 1.4-1.5GW in the first quarter, 3.2GW in the first half of the year, 700MW in the second quarter, 400-500MW in the first quarter, 1.1-1.2GW in the first half of the year, and it is expected to achieve battery + component 9-11GW shipments throughout the year.

In terms of earnings per watt, due to the rapid decline in upstream prices in January 23, the profit per watt of components is expected to reach more than 0.2 yuan / W in the first quarter and more than 0.2 yuan / W in the second quarter, but slightly lower than in the first quarter. The battery business is kept at the level of 0.1 yuan / W in the first and second quarters. According to this calculation, the profit per watt of the photovoltaic business in the first half of the year is expected to remain at the level of 0.17-0.18 yuan / W, and it is expected that the battery will remain relatively scarce in the second half of the year. It is expected that the module profit per watt will decline, but the battery profit per watt is still expected to remain high.

Magnetic materials: in terms of magnetic materials business, both revenue and sales volume decreased slightly compared with the same period last year, but revenue increased slightly, mainly due to the decline in downstream demand and the downward impact of upstream raw material prices, and profits are expected to be basically the same or slightly decreased in the first half of the year. Future growth still depends on downstream demand.

Lithium battery: the battery business suffered a slight decline in profits due to last year's high base, but maintained a certain increase in revenue and sales, due to increased competition in the industry on the one hand and increased costs in the climbing of new capacity on the other.

Investment suggestion: the company's 23-25 net profit is expected to be 2.790 billion yuan, + 37.7%, 12.7%, 7.7%, 1.41, 1.59 and 1.72 yuan, respectively, to maintain the "overweight" rating.

Risk hint: product competition aggravates risk, industry overcapacity risk, overseas tariff policy risk