2023H1 PV business contributes main revenue and maintains “buy” rating

The company released its 2023 mid-year report. 2023 H1 achieved revenue of 560 million yuan, +815.91% year-on-year, mainly due to the photovoltaic module sales revenue achieved by photovoltaic assets installed at the end of 2022 in the current period; net profit of 5.3699 million yuan was 5.3699 million yuan. Compared with the same period last year, it turned a loss into a profit. 2023H1 is gradually releasing products such as photovoltaic cell modules, etc., and the photovoltaic module sector contributed the main revenue. During the reporting period, the PV module sector achieved revenue of 503 million yuan, accounting for 89.88% of total revenue. We maintain our profit forecast. We expect the company's net profit from 2023-2025 to be 0.51/0.61/77 billion yuan, the corresponding EPS is 0.08/0.09/0.12 yuan/share, and the PE corresponding to the current stock price is 62.7/52.4/41.2 times, respectively, maintaining the “buy” rating.

Production capacity in the photovoltaic business has been steadily implemented, and Guosheng Energy's path to a new leader in heterogeneity has set sail

In terms of current production capacity, according to the company's announcement, its 1.5 GW large module production line and 1 GW battery sheet production line built in Xuzhou, Jiangsu, and the 1 GW large module production line built in Huaibei, Anhui have already been put into operation. Moreover, the company's inventory turnover is only 55 days, and the operating capacity is excellent; the cash-to-income ratio is 81.25%, and the profit quality is high.

In terms of planned production capacity, Guosheng Energy has laid out heterogeneous industrial chain bases in the three provinces of Jiangsu Province (Xuzhou Jiawang), Anhui Province (Lieshan, Huainan, Fengtai, Suzhou), and Hebei Province (Yangyuan, Zhangjiakou, Leting, Tangshan).

Recently, the company plans to launch a heterojunction battery production capacity of 2 GW (Fengtai, Huainan, 1 GW, Leting, Tangshan), 5 GW of heterojunction module production capacity (2 GW in Fengtai, Anhui, 1 GW in Leting, Tangshan, 2 GW, Yangyuan, Zhangjiakou), and a silicon wafer production capacity of 1 GW (Tangshan Leting). Looking ahead, the company plans to invest a total of 40 billion yuan during the “14th Five-Year Plan” period, and plan to lay out and build 30 GW batteries, 30 GW components and related industrial chain projects throughout the country according to the “1+N” model.

The agreement transfer went hand in hand with the targeted increase. On August 9, 2023, Guosheng Energy received control. On August 9, 2023, Qianjing Garden announced the “Share Transfer Agreement” and the progress of the control change. Guosheng Energy (holding 8% of Qianjing Garden's shares before the transfer) plans to transfer 56.6873 million shares (8.85% of the total share capital) at a price of 7.78 yuan/share. After completing the share transfer, Guosheng Energy will hold 108.296 million shares (16.85% of the total share capital) of the company, becoming the company's controlling shareholder. At the same time, the company announced a fixed increase plan, and Guosheng Energy plans to increase the company's capital by no more than 778 million yuan at a price of 408 yuan/share.

Risk warning: The transfer of control has not been implemented; the progress of HJT commissioning and the introduction of cost reduction and efficiency technology has fallen short of expectations.