Penghui Energy announced results for the first half of 2023:23H1 achieved revenue of 4.375 billion yuan, up 7.6% year on year, of which 23Q2 achieved revenue of 1,879 billion yuan, down 21.8% year on year and 24.7% month on month; realized net profit of 251 million yuan, up 3.1% year on year. Of these, 23Q2 achieved net profit of 69 million yuan, down 55.1% year on year, and 62.3% month on year. 23Q2 gross margin was 17.36%, down 2.6 pct from the previous month. Affected by falling terminal prices and the removal of inventory from downstream accounts, 23H1's performance was slightly lower than expected.
23Q2 The energy storage business was under pressure month-on-month, and the growth rate of the large storage business was relatively fast. 23H1 continued to strengthen its energy storage business, and its revenue share increased to 64%. On the account storage side, due to the effects of falling electricity prices in Europe and declining subsidies, etc., European household storage has entered the inventory removal stage. It is expected that the Q2 account storage business will be under pressure month-on-month, and Q4 is expected to come to an end. The big storage business is growing fast, but due to falling prices of lithium carbonate, etc., downstream bidding and delivery progress fell short of expectations. At present, Dazan has sent samples to European and American customers, and the company is also speeding up the development of emerging markets such as South Africa and the Middle East. 23H1 has accelerated the deployment of energy storage capacity, including the construction of projects such as 20 GWh in Liuzhou, 41 GWh in Quzhou, and 36 GWh in Qingdao. Among them, 5.5 GWh for the first phase in Liuzhou has already been put into operation, and the second phase is expected to be put into operation in the second half of the year; 11 GWh in Quzhou phase I was put into operation in June, and the second phase began construction in July. Shipments of energy storage batteries are expected to reach 11 GWh in 2023.
The economic efficiency of industrial and commercial energy storage has been shown and is expected to contribute to additional volume. As the price of lithium carbonate has fallen, compounded by the rise in the price difference between domestic electricity prices and the provision of energy storage subsidies, the economy of industrial and commercial energy storage has become apparent. Currently, the company has launched the Great series of products, including the Great One outdoor energy storage cabinet, the Great Com energy storage container, and the Great E smart cloud platform. It has applied liquid cooling system technology to the 10MWH energy storage project and achieved grid-connected operation. Shipments of 23H2 industrial and commercial energy storage are expected to reach 1-2 GWh, and sales are expected to increase significantly.
Gross margin declined month-on-month, and credit impairment dragged down profit performance. 23Q2 gross margin was 17.36%, down 2.6 pct from the previous month. Revenue from the consumer battery business is expected to grow steadily in 23Q2, and power battery profit will drop sharply. It is mainly affected by fluctuations in terminal demand and price reductions, which will drag down the company's overall profit performance. 23H1's credit impairment loss was approximately $43 million, an increase of $42 million over 22H1, further hampering 23Q2's profit level. 23Q2's inventory was 2,468 million yuan, a slight increase from Q1.
Profit forecast and investment advice: We expect the company to achieve revenue of 127.3/2019/24.24 billion yuan in 2023-2025, and net profit of 11.2/16.6/2.14 billion yuan (previous value was 1,32/18.5/2.66 billion yuan). The company's profit for the first half of the year fell short of expectations, considering that the company's profit for the first half of the year fell short of expectations. As inventory removal came to an end and lithium carbonate prices stabilized, the energy storage market was expected to be released in the second half of the year. Continuing to give the company 30 times PE in 2023, the target price was lowered from 86.1 yuan to 73.0 yuan, maintaining the “superior to market” rating.
Risk warning: Energy storage shipments fell short of expectations, sales of new energy vehicles fell short of expectations, and competition in the industry intensified.