Core viewpoints

2023Q1-3 continued high revenue growth, steady increase in profitability, and performance in line with expectations. Since 2023Q3, the prosperity of the domestic power lithium industry has improved, and the acceptance of the company's 2023Q3 has been significantly accelerated.

Looking forward to 2023Q4, we judge that ACC, Volkswagen and other European enterprises lithium equipment orders are expected to land, the company is expected to receive a larger share of orders, while the company's photovoltaic equipment business is expected to further expand. In the medium and long term, the company continues to promote the platform strategy, photovoltaic equipment business has achieved volume since 2023, the follow-up 3C equipment, laser equipment, hydrogen equipment and other business is expected to drive the company's long-term growth.

Event

The company released three quarterly reports in 2023, 2023Q1-3 achieved revenue of 13.186 billion yuan, + 31.86% year-on-year; net profit of 2.324 billion yuan, + 39.54%. Among them, the revenue of 2023Q3 in a single quarter was 6.101 billion yuan, + 34.04% compared with the same period last year, and the net profit was 1.123 billion yuan, + 31.71% over the same period last year.

Brief comment

The acceleration of acceptance and order acceptance of domestic power lithium power business is still the main driving force of the company's revenue growth.

2023H1 due to the lack of operating rate of downstream power battery enterprises, the progress of the project has generally been delayed, resulting in a decline in bidding and acceptance. After entering 2023Q3, the operating rate of domestic head power battery enterprises has recovered, and the speed of acceptance and order acceptance has been accelerated, which is directly reflected in the company's 2023Q3 revenue of 6.101 billion yuan, an increase of 34.04% over the same period last year and 60.05% from the previous year, and the situation of new orders has also recovered compared with the first half of the year.

The business demand of overseas lithium power equipment and photovoltaic equipment is booming, and the company continues to dock with its head customers, making smooth progress.

1) overseas lithium power equipment, since 2021, the company has made great efforts to lay out the European market, and has realized the batch supply of leading enterprises such as Sweden Northvolt, German Volkswagen, France ACC, Turkey SIRO, etc., and the European market demand has continued to be strong since 2023. We judge that with the orders of ACC, Volkswagen and other enterprises, the company's overseas lithium equipment order proportion is expected to further increase. In addition, the company further increases the layout of power lithium electricity new markets in North America and Southeast Asia. With the high demand of the above-mentioned market, it is expected to stabilize the cyclical fluctuations of the domestic market in the future.

2) in terms of photovoltaic equipment, the company continues to devote itself to the development and mass production of new photovoltaic technology and equipment, laying out new battery automation equipment such as TOPCon, HJT, XBC, perovskite and so on. According to the company's Wechat official account, in 2023, the whole process XBC equipment provided by Q3 company successfully reached full production in the industry head customer site, won customer recognition and additional orders, and has so far received more than 2 billion + equipment orders.

The layout of the platform continues to advance, and the non-lithium business can be expected in the future.

The company is positioned as a high-end equipment platform company, in addition to the above lithium equipment, photovoltaic equipment, the company has a strong competitive advantage in many other downstream equipment fields. 1) 3C: take the self-developed 3D vision algorithm as the core technology to establish 3D full-scene application, which has reached the world's leading level in vision measurement, AI defect detection, precision molding, general assembly and other technologies, and can provide overall solutions for mobile phones, notebooks, tablet computers, smart wear, automotive electronics, new display and other industries. 2) Laser: provide laser cutting, welding, marking, etching, opening and other laser processing equipment, laser FPC processing equipment, MicroLED laser massive transfer equipment, etc.; 3) hydrogen energy: in terms of fuel cell, it has formed a long-term strategic cooperation relationship with domestic and foreign leading enterprises such as Jethydrogen technology, which can provide hydrogen fuel cell whole-line solution. In the PEM electrolytic cell, has formed cooperation with a number of well-known enterprises, can provide PEM electrolytic cell hydrogen production line equipment.

Profit forecast and investment suggestion

It is estimated that the company's operating income from 2023 to 2025 is 196.57 yuan, 244.97 yuan and 28.523 billion yuan respectively, which is + 41.09%, + 24.62% and + 16.44% respectively compared with the same period last year. The net profit of the company is 34.89,44.19 and 5.203 billion yuan respectively, and the year-on-year net profit is + 50.54%, + 26.67% and + 17.75% respectively, corresponding to PE 11.76,9.29,7.89 times respectively.

Risk analysis.

1) downstream industrial policy change risk: the company's business is highly related to China's new energy industry policy, if major adverse changes occur in the relevant industrial policy, it will have a negative impact on the company's operating performance.

2) the order profit is lower than expected: since 2021, domestic and foreign power battery enterprises have accelerated production expansion, causing a strong demand in the lithium power equipment industry, and at the same time attracting many automation equipment enterprises to enter the lithium battery field. As the growth rate of downstream production expansion slows, the lithium equipment industry has the possibility of intensified competition in the industry, and the profitability of new orders may be under pressure.

3) customers who expand new areas are not as expected: if the company develops overseas, the progress of energy storage customers is not as expected, or it may adversely affect their new orders.