Core views:
The company disclosed its 2023 annual report, and the profit level was gradually restored. The company's 23H1 achieved revenue/net profit/net profit of 278.50/19.04/1,843 billion yuan, YoY +17.91%/+13.70%/+13.08%; 23Q2 single quarter revenue/net profit/net profit after deducting non-attributable net profit of 121.09/7.02/757 billion yuan, YoY -6.40%/-36.26%/-21.47%; 23H1 gross profit margin 22.29%, +0.27pcts. The company's performance growth in the first half of 2023 was due to low pressure and rapid growth in the new energy industry.
Smart appliances optimize domestic channels and accelerate the expansion of overseas markets. The company promotes the flattening and balancing of channel levels, and comprehensively enhances channel coverage and penetration. Core distributors were selected and developed into regional distributors, 1,600 new distributors were developed, and the coverage rate of local and municipal channels increased from 81% to 85%. In addition, the company accelerated its expansion into overseas markets: during the reporting period, Zhengtai International achieved revenue of 2,319 billion yuan, +29.14% over the same period last year. Among them, the Greater Asia Pacific region's revenue was +3.11%; the Greater Europe region's revenue was +40.93%; the North American region's revenue was +52.27%; the West Asia and Africa region's revenue was +20.09%; and Latin America's revenue was +13.59%.
Household photovoltaics are growing rapidly, and power plants continue to optimize operations. During the reporting period, Zhengtaian achieved revenue of 13.705 billion yuan, net profit of 1,202 billion yuan, and 23H1 achieved development and grid-connected capacity exceeding 5.3 GW.
The total installed capacity of Zhengtai Aneng household photovoltaics exceeds 20 GW, with more than 1 million end household users. The market share has remained number one in the industry for many years. In terms of domestic power plants, revenue from power plant sales to central enterprises in China exceeded 10 billion yuan during the reporting period. In terms of foreign power plants, a joint venture EPC company was set up with partners to undertake European EPC business, with a contract volume exceeding 1 GW. Zhengtai Germany's Schoenermark 65.4 MW project was successfully selected as a German electricity price subsidy photovoltaic project, further increasing revenue.
Profit forecasts and investment recommendations. It is estimated that EPS in 2023-2025 will be 2.37/2.75/3.15 yuan/share, respectively. Taking into account industry space, company market position, and industry valuation, the company will be given a price-earnings ratio of 15 times in 23, corresponding to a reasonable value of 35.54 yuan/share, and maintain a “buy” rating
Risk warning. Market competition risks; raw material price fluctuations; rising labor costs, etc.