Event

On October 28, 2023, the company released its three-quarter report in 2023. In 2023, Q1-Q3 achieved an income of 2.008 billion yuan, + 78.85% compared with the same period last year; realized a net profit of 84.7637 million yuan, + 68.23%; and deducted a net profit of 81.0472 million yuan, + 65.73% over the same period last year.

From a quarterly point of view, 23Q3 achieved income of 974 million yuan, year-on-year + 151.89, month-on-month + 61.34%; net profit of 46.2465 million yuan, + 157.01%, month-on-month + 83.28%; deduction of non-return net profit of 46.0519 million yuan, + 140.21% year-on-year, + 86.70%. Overall, the performance exceeded expectations, and the significant increase in the company's performance compared with the previous month was mainly due to the sufficient sales orders of the company and the increase in sales of high and low voltage busbars, photovoltaic welding strips and energy storage products, resulting in a larger increase in operating revenue compared with the same period.

The ability of cost control is good, and the profitability is slightly higher than that of the previous month.

In terms of expenses, the sales expense rate, management expense rate and financial expense rate of Q3 company in 2023 are 3.71%, 5.63% and 1.10% respectively, compared with-0.57Pcts,-0.97Pcts and + 0.36Pcts.

In terms of profitability, Q3's gross profit margin and net profit margin in 2023 were 17.87% and 5.17% respectively, increasing 0.04Pcts and 0.47Pcts on a month-on-month basis.

Optical storage business goes hand in hand, and power distribution business grows significantly.

Photovoltaic: the company's Q3 photovoltaic new materials business revenue is + 149% compared with the same period last year, of which the welding strip revenue is + 174% compared with the same period last year. Q3 SMBB welding strip shipments increased to 50% from 30% in the first half of the year. We believe that with the acceleration of TOPCon capacity release, the proportion of SMBB welding strip will continue to increase, thus thickening the company's profits.

Energy storage: energy storage system Q3 achieved 170 million income (20.7518 million yuan confirmed in the first half of the year), a significant increase compared with the same period. The company has sufficient energy storage orders on hand, and has created a full series of energy storage system product matrix, which is dominated by grid source side energy storage, industrial and commercial energy storage, and supplemented by household and portable energy storage.

Distribution equipment: the company's Q3 distribution business increased by 87% year-on-year, of which bus revenue increased by 107%.

Investment suggestion

It is estimated that the revenue of the company in 23-25 will be 30.74 million yuan, respectively, and the net profit of returning to the mother will be 120 million yuan, 200 million yuan, and 290 million yuan respectively, corresponding to PE in 22-13-9. Overall, the company's power distribution business has developed steadily, the proportion of products such as SMBB and low-temperature welding tape has gradually increased and increased profits, and the energy storage business has begun to contribute revenue and maintain the "recommended" rating.

Risk hint

Downstream demand is not as expected, capacity construction is not as expected, market competition is intensified, and so on.