Key points of investment
2023 mid-year report: performance increased 65%; orders increased, and battery businesses such as photovoltaic modules and perovskite are expected to accelerate 1) Performance exceeded expectations: revenue for the first half of 2023 was 3.4 billion yuan, up 49% year on year; net profit for the first half of 2023 was 240 million yuan, up 65% year on year. Revenue for the Q2 quarter was 2.1 billion yuan, up 66% year on year; net profit for the second quarter was 190 million yuan, up 66% year on year. Business structure: PV automated production line revenue was 2.7 billion yuan, up 76% year on year; packaging machinery business revenue was 390 million yuan, down 2.2% year on year. The core benefits from the company's PV module equipment business volume.
2) Profitability is steady: gross profit margin in the first half of the year was 20.9%, +1pct year on year; net interest rate of 8.3%, +1.5 pct year on year. Business structure: PV automated production line business gross profit margin of 21.5%, year on year +0.4 pct; packaging machinery gross profit margin of 23.7%, year on year +3.5 pct.
3) Orders exceeded expectations: At the end of the second quarter, the company's contract debt reached 2.45 billion yuan, an increase of 80% over the previous year. Inventories reached 5.4 billion yuan, a year-on-year increase of 100%. As of June 30, 2023, the company's PV sector had orders of 9.202 billion yuan (tax included), an increase of 121.4% over the previous year. Benefiting from increased demand for photovoltaics+integration trend+demand for N-type battery modules, the expansion of module production in 2023 is booming, and the company will fully benefit. At the same time, the company's new battery equipment business will enter a multi-point stage of blossoming, and there is plenty of room for perovskite equipment to grow.
4) R&D expenses: In the first half of the year, it reached 160 million yuan, a year-on-year increase of 54%, accounting for 4.7% of revenue. The company continued to increase R&D in the field of perovskite equipment. It can provide MW grade perovskite and overall solutions, and can also provide GW grade perovskite mass production equipment support.
Jingshan Light Machinery: Perovskite equipment has a large market space; component equipment and HJT+TopCon equipment have blossomed at multiple points 1) Perovskite equipment: Perovskite equipment market space is expected to be 83.6 billion yuan in 2030, CAGR = 80% in 2022-2030. The company has deployed PVD, ALD, clustered multi-chamber evaporation equipment, component packaging equipment, etc., and has achieved mass production and successfully applied to multiple clients. It will have the ability to deliver complete line equipment for perovskite batteries. If it maintains its first-mover advantage, it will fully benefit from the wave of perovskite industrialization.
2) Component equipment: The market size of component equipment (assembly lines+laminators) is expected to reach 10 billion yuan in 2025, and CAGR = 16% in 2022-2025. The company is a leader in automated production line equipment for components, serving leading customers at home and abroad, benefiting from the expansion of component production.
3) TopCon equipment: The company's core layout is TopCon 2-in-1 coating equipment (PECVD+PVD), and is looking forward to a breakthrough.
4) HJT equipment: The company cooperated with Jinshi Energy to clean velvet equipment, which has received a 4GW mass production order, benefiting from increased industry sentiment.
Investment suggestions: leader in perovskite equipment; photovoltaic modules, TopCon, and HJT battery equipment have blossomed. The company's net profit from 2023-2025 is expected to reach 4.9/65/83 million yuan, an increase of 62%/33%/27% over the previous year, corresponding to a PE of 20/15/12 times. Maintain a “buy” rating.
Risk warning: New product marketing falls short of expected risks; risk of downturn in industry sentiment; risk of market competition.