Incidents:
The company released its 2023 interim report. 23H1 achieved total operating income of 2.146 billion yuan, an increase of 79.61% over the previous year, and achieved net profit of 185 million yuan, an increase of 95.91% over the previous year. The review is as follows:
The power battery business led to rapid revenue growth, and the decline in cost rates during the period led to an increase in net interest rates. By product, the 23H1 power battery business achieved revenue of 1,804 million yuan, an increase of 109.98%; the consumer electronics business achieved revenue of 176 million yuan, an increase of 4.34%; and the sheet metal cutting business achieved revenue of 83 million yuan, a year-on-year decrease of 6.74%. 23H1's gross margin was 30.48%, down 3.51 pct from the previous year, which is basically the same as the gross margin level for the full year of '22. The scale effect of the company was evident. The sales/management/R&D expense ratio decreased by 2.69 pct/0.95 pct/0.45 pct, respectively. The decline in the cost rate during the period caused the company's 23H1 net interest rate to increase by 1.03 pct year-on-year, reaching 8.56%.
There are sufficient orders in hand, and further expansion of production capacity is planned. According to the company's interim report, from January to June 2023, the company signed new orders of about 2.7 billion yuan (tax included). As of June 30, 2023, the cumulative amount of orders in hand was about 8.5 billion yuan (tax included). At the end of '22, the company's on-hand orders were 8.1 billion yuan (tax included). Although the expansion of production by domestic power battery manufacturers has slowed down this year, the company's on-hand orders at the end of '23 still increased compared to the end of '22. According to the “Response Report to the Review and Inquiry Letter for Issuance of Stock Application Documents to Specific Targets (Exempt Version)” issued by the company on August 11, the production capacity utilization rate of the laser and automation equipment expansion projects in Jiangsu and Jiangmen previously raised by the company has exceeded 100%, and the company is already at full production. The company plans to raise additional capital to build the “Western Laser Intelligent Equipment Manufacturing Base Project (Phase I)” in Chengdu and implement the “Hymeng Laser Intelligent Manufacturing Center Project” on the basis of the existing Jiangmen production base to further expand production capacity and enhance production delivery capacity.
Market development has been strengthened, and the photovoltaic business is progressing well. According to the company's interim report, the company's photovoltaic business has received orders from well-known customers such as Jingke Energy, Tianhe Solar, Tongwei Co., Ltd., Hongyuan Green Energy, Jietai, Zhengtai, Artes, Hesheng Silicon, and GCL. As of the disclosure date of the interim report, the company's TopCon laser has signed a contract for 350GW+ for one-time blending equipment. Also, according to the “Prospectus for Issuing A-Shares to Specific Targets (Declaration Draft)” issued by the company on June 30, the company's PV equipment orders have exceeded 400 million yuan.
Profit forecast: The company's net profit for 2023-2025 is expected to be 6.84, 8.98, and 1,090 million yuan, respectively. The corresponding PE values are 13, 10, and 8 times, maintaining the “buy” rating.