Matters:
The company released its semi-annual report for 2023. 2023H1 achieved operating income of 1,065 million yuan, +107.30% year on year; net profit of 348 million yuan, +72.68% year on year; net profit of 332 million yuan after deducting non-return net profit of 332 million yuan, +72.58% year on year; gross profit margin of 42.78%, -3.30 pct year on year. 2023Q2 achieved operating income of 485 million yuan, +70.17% year on year, -16.50% month on month; net profit of 172 million yuan, +50.28% year on month, -2.36% month on month; net profit after deducting non-return net profit of 159 million yuan, +48.26% year on year, -7.89% month on month; gross profit margin of 38.43%, -5.95 pct year on year, -7.98 pct.
Commentary:
The micro-inverse business is under pressure in the short term, and new products help the company develop. 2023H1 achieved sales revenue of 883 million yuan, an increase of 99.6% over the previous year; the shipment volume was about 891,800 units, of which about 330,000 units were shipped in 2023Q2, a decrease of about 41.1% over the previous year. 2023H1 is mainly sold to Europe, accounting for about 60% of sales volume. The month-on-month decline in micro-reverse shipments in the second quarter was mainly due to the backlog of inventories in the micro-reverse market. At the same time, the German balcony photovoltaic policy switch has not yet been implemented, affecting micro-reverse shipments. As overseas shipments come to an end, slightly negative shipments are expected to pick up steadily in the third quarter. The company has strong technical strength, continues to plan and launch new products, launched a new one-to-four 2000W three-phase micro-inverse to broaden the application boundaries of micro-inverse; launched products such as one-to-two, one-traw-four WIFI built-in micro-inversion, etc., to support end-user DIY photovoltaic systems, simplify the installation process of photovoltaic systems, and accelerate the development of the micro-inverse market.
The energy storage business is gradually being expanded, creating a new growth curve. The company's energy storage-related products mainly include energy storage inverters and energy storage systems. 2023H1's energy storage system achieved sales revenue of 86 million yuan. Energy storage system products mainly include HoyUltra outdoor all-in-one liquid-cooled energy storage integrated system, HoyCore outdoor liquid-cooled energy storage integrated system, HoyPrime liquid-cooled energy storage integrated system, HoyHome household energy storage battery, etc. The company's energy storage inverter products have successively passed grid-connected certification in important countries such as Germany, Poland, France, the United Kingdom, Australia, Austria, and Pakistan. The conversion efficiency can reach 97.6%, and can also be operated and maintained in real-time, and can be monitored in real time. It can also be reused with micro-inverse product channels, and is expected to achieve rapid growth.
Investment suggestions: The competitive advantage of the company's micro-inverse products is obvious, the channel development effect is remarkable, and at the same time, the expansion of the energy storage business is accelerating. Considering the reduction in shipping expectations, we adjusted our profit forecast. We expect the company's net profit to be 833/13.75/1,996 million yuan (previous value: 939/1,501/2175 million yuan), respectively, and the current market value corresponding to PE is 25/15/10 times, respectively. Refer to the valuation of comparable companies and give 18x PE in 2024, corresponding to a target price of 297 yuan, maintaining the “recommended” rating.
Risk warning: terminal demand falls short of expectations, capacity expansion progress falls short of expectations, increased market competition, etc.