Hengdian East Magnetic released the mid-2023 report, 23H1 achieved revenue of 10.25 billion yuan, year-on-year + 9.4%, return to the mother net profit of 1.21 billion yuan, + 52% year-on-year. 23Q2 achieved revenue of 5.61 billion yuan, year-on-year + 12.88%, month-on-month + 21.21%, return to the mother net profit of 629 million yuan, year-on-year + 45.8%, month-on-month + 7.93%.
The rapid growth of photovoltaic profits focuses on differentiation strategies. 2023H1 shipped 3.3GW components, up 50% from the same period last year, while battery sales reached 1.2GW. The company continues to deepen the implementation of differentiation strategy, strengthen the construction of marketing service system and market expansion of high-quality markets at home and abroad. From the shipping structure, Europe accounts for 66.5%, Asia except China accounts for 15.7%, China accounts for 17.0%, North America accounts for 0.5%, Africa accounts for 0.3%, European shipments continue to increase. The power of the company's N-type components can achieve full 415W-630W coverage, and the highest conversion rate can reach 22.45%. With the commissioning of 12GW's N-type battery and 5GW module project, the company's photovoltaic business is expected to continue to grow.
Stable contribution of magnetic materials business. Magnetic materials business 23H1 achieved revenue of 1.82 billion yuan, shipments of 92000 tons, slightly lower than last year's shipments of 94800 tons, while the decline in average sales price led to a decline in revenue compared with the same period last year. The main reason for the decline in the average price of magnetic materials is weak demand downstream, but in the case of weak recovery in the downstream household appliances and consumer electronics industries, shipments in the field of new energy vehicles and photovoltaic inverters continue to rise. at the same time, trumpet magnetic, magnetic tiles and other products to achieve reverse market growth.
Lithium power business focuses on small power, achieving both shipments and revenue growth. In terms of shipments, 23H1 lithium electricity shipments reached 140 million units, + 36 per cent year-on-year. Lithium power business production capacity growth rate industry leading, household storage products to achieve overseas shipments. With the release of the capacity of the 6GWh high-performance lithium battery project, it provides space for the further development of the company. At the same time, the company is also actively arranging household storage, balcony energy storage and other products, and achieved the verification of household storage products in the Southeast Asian market.
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