On October 27, the company disclosed its three-quarter report of 2023, with revenue of 3.95 billion yuan in the first three quarters,-4.4% year-on-year, and net profit of-75 million yuan,-156% compared with the same period last year. Among them, Q3 realized revenue of 1.55 billion yuan, year-on-year + 17.5%, month-on-month + 47.7%; net profit returned to the mother-41 million yuan, year-on-year-44.9%, month-on-month-27.7%, mainly because the company Q3 calculated asset impairment of 80 million yuan based on the principle of prudence.

The improvement of component scheduling leads to a high increase in shipments, and the impairment of inventory is a drag on performance. Benefiting from the continuous growth of downstream photovoltaic demand, the company's photovoltaic film shipments continued to grow. It is estimated that photovoltaic film shipments exceeded 450 million square meters in the first three quarters, of which Q3 shipments were about 180 million square meters, a substantial increase of 53% compared with Q2. This is mainly due to the continuous increase in the production of downstream components after the price of silicon has stabilized. The price of photovoltaic film products is lower in July, but the price of raw material EVA resin begins to rise, and the profit of film is under pressure. with the continuous price increase of film at the end of July and the end of August, it is estimated that the profitability of film of the company increases month by month. At the end of September, the price of EVA resin fell sharply, because the sales quotation of film followed the fluctuation of raw material price, the decline of product order price and the influence of high inventory cost. Based on the principle of prudence, the company prepared 80 million yuan for inventory price decline of EVA resin and related products at the end of the third quarter, affecting the overall performance.

The N-type volume is expected to magnify the technological advantages, and the layout of overseas production capacity will continue to advance. With the expansion of new technologies such as TOPCon, BC and HJE, the company has actively carried out research and development reserves of related products, adding single-layer POE film and developing EXP film products. POE (single-layer POE, EXP, EPE) accounted for nearly 40% in the third quarter; at the same time, achieve independent research and development and industrialization of HJT light conversion agents, and continue to improve the competitiveness of products. In 2018, the company launched EPE film, which has a deep technology accumulation and is expected to fully benefit from the N-type development trend and further enhance profitability and market share. In addition, the company is actively promoting the layout of overseas production capacity, and the Vietnamese factory is expected to start production next year, which will continue to enhance its global competitiveness.

The rapid development and introduction of automotive materials is expected to contribute to new performance growth points.

According to our latest judgment on product prices, we downgrade the company's homing net profit forecast for 2023-2025 to 0.32 (- 91%), 4.4 (- 8%) and 508 (- 24%) billion yuan, respectively, and maintain the "buy" rating corresponding to 11 times PE for 24-25 years.

The price of raw materials rose more than expected; the competition situation deteriorated.