3Q23 performance is in line with our expectations
The company announced 3Q23 results: 1-3Q23 realized income of 3.341 billion yuan, year-on-year + 3.71%; return to the mother net profit of 85 million yuan, compared with-62.71% of the same period last year; 3Q23 realized income of 1.12 billion yuan, + 16.30% year-on-year, month-on-month ratio of-5.15%; return to the mother net profit of 35 million yuan, year-on-year-34.72%, month-on-month + 103.25%, corresponding to 0.08 yuan per share, in line with our expectations.
Trend of development
The cost of raw materials has been greatly reduced, the product structure has been optimized, and the profitability of the company has been continuously repaired.
In terms of film, 3Q23 achieved 74 million flat sales, + 88.80% year-on-year, + 15.06% month-on-month, and the average sales price was 9.04 yuan / ping,-28.03% year-on-year and-6.61% compared with the same period last year. We believe that the company's high-priced particle inventory has been digested, and the downward cost of Q3 raw materials has led to profit repair. The average purchase price of Q3 particles is 14.48 yuan / ton, down 12.6% from 16.31 yuan / ton of Q2. The month-on-month decline in the price of film Q3 is less than that of raw materials, so profitability is significantly repaired. Looking forward to Q4, the current particle price falls further, and the film price reduction is closely followed. We believe that as the particle inventory cycle is generally about one month, the supply of low-cost film for high-priced particles appears again, and Q4 profits may be under pressure. however, the proportion of shipments of high-profit products such as light conversion film increases, and the rich product structure may hedge the risk of the former. As for the backplane, 3Q23's backplane sales have declined compared with the previous month. We believe that the backplane sales of Q3 Company are mainly due to the decline in the volume of centralized ground power stations and the decline in distributed demand. Q3's backplane sales are 28 million square meters, year-on-year-5.39%, month-on-month-28.16%, and the average sales price is 9.47 yuan / flat. Year-on-year-13.91%, month-on-month + 0.32%. At the cost end, the purchase prices of 3Q23PET base film and PVDF film are 1.70xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
New insulation strips, XBC battery welding wire tape, high resistance water seal edge glue emerge one after another, it is optimistic that the company will bring forth the new and grasp the opportunity of new battery technology. The company adheres to the strategy of "concentric circle, market segmentation and continuous innovation" and continues to develop new products. At present, TopCon and perovskite high resistance water backplane products have been introduced into foreign perovskite enterprises; high resistance water seal edge glue step production stage; XBC battery welding wire tape can cover the battery gap, achieve the aesthetic effect of power generation efficiency gain and appearance of all black. Under the trend of reducing cost and increasing efficiency of battery module technology, we are optimistic that the company will persist in developing new packaging materials and seize the opportunity of technology iteration to provide endogenous power for performance growth.
Profit forecast and valuation
We keep our profit forecast of RMB 129max in 2024 unchanged, maintain the industry rating of outperforming, keep the target price unchanged at RMB18.44, and correspond to 32 times Pmax E in 2024, which is 18% higher than the current stock price, and the current share price corresponds to 27 times Ppace E in 2024.
Risk
Photovoltaic installation is not as expected, raw material price fluctuation risk, battery new technology mass production is not as expected.