Incident Overview
On August 25, the company released its 2023 annual report. 2023H1's operating income was 1,972 million yuan, up 11.83% year on year, net profit of 491 million yuan, up 13.67% year on year; net profit of non-return net profit was 509 million yuan, up 18.22% year on year.
The company's gross margin for the first half of the year was 38.77%, an increase of 0.25 pct over the previous year.
According to estimates, the company Q2 achieved revenue of 1,042 million yuan, a year-on-year increase of 12.92%, a month-on-month increase of 12.17%, net profit of 260 million yuan, a year-on-year increase of 14.17%, a year-on-year increase of 12.43%, net profit of 279 million yuan, a year-on-year increase of 17.31%, a month-on-month increase of 17.23%, a gross profit margin of 39.77%, a year-on-year increase of 0.6 pct, and a month-on-month increase of 2.12 pct.
Benefiting from strong demand for downstream new energy, steady growth in performance in the first half of the year benefited from strong demand for thin-film capacitors for downstream new energy electric vehicles and solar storage. The company's performance in the first half of the year grew steadily, achieving revenue of 1,972 billion yuan, an increase of 11.83% over the previous year; in the first half of the year, the company's gross margin was 38.77%, an increase of 0.25 pct over the previous year. In an increasingly competitive environment, it was still able to maintain stable gross margin and highlight the company's product quality and strong cost control capabilities.
The total cost rate for the four items in the first half of the year was 7.3%, a year-on-year decrease of 1 pct. Mainly because the company continued to improve operating efficiency and strengthen cost control, the cost rate declined.
Pay attention to R&D investment and fully grasp the development trend of new energy
1) The company's R&D investment continues to increase, further consolidating its leading position in the industry. 2023H1's R&D expenses reached 64 million yuan, and continuous technology research and development continues to improve product quality. 2) The company fully enjoys the dividends of industry development, actively lays out the fields of photovoltaic wind power storage and new energy vehicles, and closely grasps the development trend of new energy. Furthermore, independent research and production of metallized film materials for thin film capacitors has been realized. Through technology research and development, improving the level of equipment automation, optimizing supply chain management, and improving information system construction, the company's overall competitiveness has been further improved. 3) At present, the company's main products have entered the supply chain of mainstream brands at home and abroad. It has developed well-known brands such as BYD, NIO, Ideal, Xiaopeng, Huawei, Sunshine Power, and Jinlang as the company's customers. The customers are of high quality and technical level. We expect that with future NEV voltage platform upgrades, the amount of thin film capacitors used for bicycles will further increase; and as demand in fields such as photovoltaics, wind power, and energy storage continues to grow, the company's thin-film capacitor business will further expand.
Investment advice
Considering fluctuations in the external environment and increased competition in the industry, we expect net profit to be $1,26/1558/1,976 million for 2023/2024/2025 (previously estimated net profit of $1,33/1.65 billion yuan for 23/24). Referring to the closing price of 2023/8/25, PE is 20/16/13 times, respectively, maintaining the “buy” rating.
Risk warning
Downstream demand falls short of expectations, prices of major raw materials fluctuate, and industry competition intensifies