The performance maintains the high growth trend, the profitability continues to repair

The company released its 2023 semi-annual report, with revenue of 5.605 billion, year-on-year + 100.3%, home net profit of 112 million, year-on-year + 197.4%, gross profit 9.5%, year-on-year + 3. Lpcts, net profit 2.0%, year-on-year + 0.5pcts of which Q2 revenue is 4.05 billion, year-on-year + 168.8% Homing net profit 84 million year-on-year + 436.8%, gross profit 9.1%, year-on-year + 3.2pcts, net profit 2.1%, same / month + 0.9pcts/+0.3pcts. The company's cash flow improved. The net operating cash flow of H1 was 748 million, while that of Q2 was 469 million in a single quarter, which was significantly better than that of the same period last year. The company's turnover rate increased, inventory turnover days decreased to 49.4 days, and accounts receivable turnover days decreased to 21.4 days, both of which were the lowest in recent years.

Industry chain price reduction is good for downstream demand, the global photovoltaic boom is expected to maintain 2023Q2, silicon continues to decline. According to PVInfolink, as of 08-23, the price of polysilicon densifier was 75000 / ton and YTD decreased by 60.5%. The price of P-type N-type double-sided double glass assembly was 1.26 yuan / W and 1.35 yuan / W, respectively, and YTD decreased by 319% and 31.8% respectively. Under the price for volume, downstream, especially the cost-sensitive ground power station installation demand is expected to get a comprehensive boost. According to the National Energy Administration / EIA, China's centralized photovoltaic installation in 2023H1US utilities photovoltaic installation is 37.5/5.9GW, year-on-year + 233.7% 6max photovoltaic 24.4%. China's centralized photovoltaic has bottomed out since 2022, accounting for 47.8% of the total installed photovoltaic capacity. In the United States, due to the limitations of the supply chain, utility-level photovoltaic installation is not as expected. With the gradual easing of supply chain problems, the United States is expected to reach 25.2GW for utility-grade photovoltaic installations in 2023. Year-on-year + 124.0%. Under the optimistic forecast, the photovoltaic installed capacity forecast is expected to be raised. According to the CPIA forecast, the global / Chinese photovoltaic installed upper limit will be raised to 350GW/140GW in 2023 and + 52.2% / + 60.2% compared with the same period last year.

Focusing on the domestic component market, the steady pace of capacity delivery releases performance elasticity and the company's domestic business has improved significantly. According to the semi-annual report, 2023H1's domestic revenue was 5.011 billion yuan, + 460.4% compared with the same period last year, accounting for 89.4% of total revenue from 31.9% of 2022H1. The gross profit margin of domestic business was 9.9%, year-on-year + 4.1pcts. In terms of business, the contribution of component business is mainly incremental. 2023H1's component business revenue is 5.136 billion yuan, year-on-year + 241.8%, gross margin 9.0%, year-on-year + 6.3pcts.

Benefiting from the strong rebound of the component business, the company's market competitiveness has been improved. According to the international energy network data, 2023H1 China photovoltaic module calibration 109.37GW, of which the company calibration reached 4.4GW, accounting for 4%, ranking fourth. At the same time, the company has plenty of orders on hand, with 2023H1 contract liabilities reaching 1.01 billion, + 22.4% compared with the same period last year. In order to ensure order delivery and industry demand, the company continues to expand its production capacity. The production capacity of Funing 12GW and Phase I 7.5GW of Hefei Base is expected to be completed by the end of 2023, and the company's component capacity is expected to exceed 30GW by the end of this year.

Seize the opportunity of N-type development and actively cut into the field of energy storage

According to the statistics of photovoltaic headlines, the bidding capacity of 2023H1 China N-type modules is 23.54GW, accounting for more than 20%, of which about 23GW is TOPCon components, and N-TOPCon acceptance continues to increase. The company is actively laying out the N-type route, and the Wuhu 20GWTOPCon battery project is progressing smoothly. The first phase of 10GW was officially put into production in July, and the second phase of 10GW is expected to be put into production next year. The efficiency of matching components has exceeded 22.5%; 210HJT components have been certified by TUV with a power of 715W. In terms of energy storage, the company realizes the energy storage layout of the full application scene of the source grid load. 2023H1 completed the delivery of 80MWh energy storage DC warehouse system in Jinchang, Gansu Province, and completed the delivery of Guangdong 2MWh project in the industrial and commercial sector. The company in the household sector is currently focusing on Europe and Australia, while actively paying attention to household storage opportunities in North and South America and other markets to expand business.

Investment advice and profit Forecast

Photovoltaic demand exceeded expectations to maintain the high prosperity of the industry. The company has ploughed the photovoltaic field for many years, through several technical iteration cycles, and in recent years, the company has gradually eliminated its small-size and old production capacity and fully calculated it. At present, the company basically has no stock obsolete capacity burden. At the same time, add the new NTOPCon large-size battery + module integrated production capacity, actively cut into the field of energy storage. We believe that the company reverses the trend obviously, raising the net profit from 2023 to 2025 to 3.6,6.8 and 1.03 billion yuan, corresponding to the current PE value of 47, 25 and 16 times, respectively, maintaining the "buy" rating.

Risk hint

Recession in major economies; changes in photovoltaic / energy storage policies in various countries; slower-than-expected pace of corporate capacity investment; trade barriers; fluctuations in raw material prices.