3Q23 performance is slightly lower than we expected.
The company announced its results for the first three quarters, with revenue of 544 million yuan, year-on-year + 4.83%, net profit of 186 million yuan, + 15.5%, + 15.5%, 3Q23 revenue of 212 million yuan,-5.4%, month-on-month + 3.9%. The home net profit was 77 million yuan,-4.9% year-on-year and-3% month-on-month, which was slightly lower than we expected, mainly due to the decline in hourly utilization due to 3Q weather, while the company's 3Q comprehensive electricity revenue decreased by 2 points compared with the same period last year.
Trend of development
3Q23's performance is mainly affected by the weather and the decline in electricity prices. 1) Industrial and commercial photovoltaic installed capacity maintained steady growth, the company as of 1H23 cumulative industrial and commercial photovoltaic installed 782MW, year-on-year + 18.1% bot 2) utilization hours affected by the weather decreased, 3Q affected by overcast rain, typhoon weather, the company photovoltaic equivalent hours reduced 41 hours compared with the same period last year, we expect about-10% year-on-year, unit power generation decreased 3) 3Q electricity price has declined: the comprehensive electricity revenue of 3Q company decreased by 2 cents per kilowatt-hour compared with the same period last year, mainly because the phenomenon of power shortage was alleviated compared with the previous year, and the sharing of profit and loss in power transactions decreased accordingly. At the same time, we believe that component prices have fallen sharply over the past 23 years, industrial and commercial photovoltaic high IRR attracts market participants, and the proportion of client-side electricity discounts is expected to decline under the circumstances of intensified competition and partial profit concessions.
The 3Q23 expense rate performed well, and convertible bonds were issued smoothly or further reduced financial expenses. Affected by the above weather and electricity prices, the company's 3Q23 comprehensive gross profit margin is 61.7%, year-on-year-1ppt, but the net profit rate is 36.1%, year-on-year + 0.2ppt, mainly benefiting from the optimization of expense rate. The sales / management / R & D / financial expense rates of 3Q23 are 0.4%, 7.7%, 3.3%, 8.1%, respectively, compared with the same period last year + 0.1ppt/+0.3ppt/-1.1ppt/-0.1ppt. The company's convertible bonds have been placed and purchased online on October 26, with a plan to raise 880 million yuan. We believe that the smooth issuance of convertible bonds is expected to further reduce the company's financial expenses.
Be optimistic about the growth of industrial and commercial photovoltaic and the development of the company's industrial and commercial energy storage business in 2024. 1H23 national industrial and commercial photovoltaic newly installed 19.4GW, year-on-year + 81% dint 2Q23 new 10.2GW, year-on-year + 132%, month-on-month + 11%, of which Jiangsu, Guangdong, Anhui and other regions have more than doubled the growth rate. We expect that the installation of industrial and commercial units will maintain rapid growth in 2024 under the background of low component prices and relatively stable electricity prices, which will be around 40GW for 23 years. At the same time, the price of lithium carbonate has fallen, and the peak-valley price difference on the user side has widened to improve the economy of energy storage. We are optimistic that the company's 24-year industrial and commercial energy storage business is expected to increase.
Profit forecast and valuation
Taking into account the pace of the company's installation, electricity price and hourly utilization, we cut the 2023max 2024 net profit forecast by 12.1% and 6.8% to 225max 303 million yuan. To maintain the outperform industry rating, the target price will be lowered by 6.8% to 18.2 yuan, corresponding to 2023 Universe, which is 30 times Pmax E in 2024, which has 49% upside compared to the current stock price. The current stock price corresponds to 20 times Pmax E in 2023 Universe 27 in 2024.
Risk
The risk of deterioration of industrial and commercial photovoltaic competition, energy storage business expansion is not as expected, subsidies are not as expected.