Event: according to the company's semi-annual report for 2023, H1 achieved revenue of 630 million yuan in 2023,-21.10% year-on-year, realized net profit of-26 million yuan, down 180.13% from the same period last year, and deducted non-net profit of-18 million yuan, down 168.91% from the same period last year. From a quarterly point of view, the company's Q2 realized revenue of 376 million yuan in 2023, year-on-year-2.19%, month-on-month + 47.38%; realized return-4 million yuan, year-on-year-120.97%, month-on-month-81.34%; realized deduction of non-net profit of 7 million yuan,-50.97% compared with the same period last year.
Demand pressure weighed on H1 performance, and Q2 profitability improved significantly compared with the previous month: the decline in the company's 23H1 performance was mainly due to the downturn in the global economy, the continued destocking of the PC industry, and the decline in laptop structure revenue due to falling demand for notebook computers. Q2 deducted non-net profit from a month-on-month basis, and profitability repair benefited from the gradual recovery of demand for laptops and the recovery of orders. In 2023, H1 company's gross profit margin is 7.29%, year-on-year-2.92pcts; net profit margin is-4.27%, year-on-year-8.29pcts Q2 gross profit margin is 12.53%, year-on-year + 4.13pcts, month-on-month ratio + 12.95pcts; net profit rate is-1.25%, year-on-year-6.32pcts, month-on-month + 7.45pcts. In terms of expenses, the H1 sales / management / R & D / financial expense rate in 2023 was 1.19%, 4.11%, 4.01%, 0.93%, respectively, and the year-on-year change + 0.21/+1.42/-0.70/+2.81pcts. The sharp increase in financial expenses was mainly due to the decrease in foreign exchange earnings caused by exchange rate fluctuations.
Notebook industry boom repair, the proportion of metal structures continues to rise: according to Techinsights data, Q2 global laptop shipments fell 13% year on year to 47.4 million units in 2023, the first month-on-month increase since 2021, indicating that the Q2 notebook industry boom repair, demand is beginning to recover. Outlook Q3 TrendForce estimates that global notebook shipments continue to improve, and the company's performance is expected to pick up at the bottom of the electricity industry and enter the repair fast lane. In the first half of this year, the company optimized the shipping structure of notebook computer structures, and the proportion of metal structures shipped increased. The company expects that the proportion of metal structures will increase significantly for the whole year, and the revenue of metal structures will account for about half of the revenue in the second half of this year. In terms of production capacity, the company's IPO investment project "the second phase of the new PC precision structure construction project" raised 198 million yuan, and 1.8 million sets of notebook computer precision structures were added every year after it was put into production. From July to August in 2023, the company's capacity utilization of metal structures is close to 60%, and with the growth of global laptop shipments in the future, capacity utilization is expected to be repaired. The company's metal parts started relatively late, and the gross profit margin began to become positive last year and is steadily increasing. As the unit price of metal structural parts is higher than that of plastic parts, with the improvement of the yield of metal parts in the future, the company's profitability is expected to continue to improve.
Deep layout of the photovoltaic industry, power the second growth curve: in order to cope with the downward demand for consumer electronics, the company transformed the photovoltaic industry in 2022 to create the second growth curve. In the second quarter of 2023, the actual sales of photovoltaic modules were about 14 million yuan, of which about 12 million were power station projects. Revenue from some power plant projects will be confirmed in the third quarter, and the company's photovoltaic business revenue is expected to grow significantly. In terms of production capacity, the company currently has a 500MW photovoltaic module production line, the current Feimi new energy production line is fully operational, and the other two new lines of 800MW high-efficiency photovoltaic module equipment will be installed one after another in the near future and reach production by the end of the year. The company expects to complete the production capacity of 2.4GW photovoltaic modules by the end of this year and strive for the production capacity of 20GW modules within three years.
TOPCON's battery chip production line is expected to be completed next year. The first film of the photovoltaic module production line in March 2023. Orders for distributed photovoltaic power stations increased rapidly from July to August. The company has set up project companies in Anhui, Kunshan, Chongqing, Hunan and Guangxi, and the relevant distributed photovoltaic power station projects are progressing steadily.
In addition, the company set up Hubei Feimi Energy Storage subsidiary in August and plans to carry out energy storage EMS and BMS business.
With the rapid growth of the new energy industry in the future, the company's photovoltaic business is expected to usher in major development opportunities.
First coverage, given "buy" rating: the company is mainly engaged in consumer electronic product structure modules and related precision mold research and development, design, production and sales. At the same time, the company enters the photovoltaic field to engage in the R & D, production and sales of new solar cells and high-tech photovoltaic modules. The company's main products are notebook computer structure modules and related precision moulds, photovoltaic battery chips and photovoltaic modules. The company has been deeply engaged in the field of notebook computer structure module for many years, and has become one of the leading companies in the field of notebook computer structure in China, and has established a long-term and stable cooperative relationship with a number of world-famous notebook computer contract manufacturers. the products are finally used in Lenovo, Dell, Hewlett-Packard and other global mainstream and emerging notebook brands. In 2022, in order to cope with the downward impact of consumer electronics, the company began to build a second growth curve and cut into the field of photovoltaic modules from notebook computer structures. the use of their own independent mold development capabilities, high-precision plastic and metal processing capabilities and existing capacity to produce photovoltaic components such as junction boxes, frames, backboards and other supporting products to quickly enter the photovoltaic market. In 2023, Q1, the company's high-efficiency solar modules were rolled out for the first time, and the production capacity gradually climbed; at present, the 500MW new energy production line of subsidiary Femi is in full operation, and two other 800MW high-efficiency photovoltaic module production lines are expected to reach production by the end of the year. Since Q2 in 2023, with the elimination of terminal inventory, consumer electronics demand has picked up somewhat, so we expect the shipment of Q3 company's main products to be relatively optimistic; at the same time, considering the high growth of the new energy industry, we believe that with the company's new line production, photovoltaic module capacity gradually released, photovoltaic business is expected to become the company's second revenue growth pole, contributing to incremental performance. It is estimated that the net profit of the company from 2023 to 2025 is 13 million yuan, 49 million yuan and 72 million yuan, and the EPS is 0.10,0.37 and 0.55 yuan respectively, and the corresponding PE is 163x, 44x and 30x respectively.
Risk tips: new business development is not as expected, downstream demand is not as expected, market competition risk, raw material price fluctuations.