Event: The operating income of the Company in Q1-3 of 2023 was 81.119 billion yuan, with a year-on-year growth of 39.38%; the net profit attributable to the parent company was 5.077 billion yuan, with a year-on-year growth of 111.34%; the net profit deducted from non-parent company was 5.12 billion yuan, with a year-on-year growth of 128.49%. Among them, the operating income of Q3 in 2023 was 31.736 billion yuan, with a year-on-year growth of 41.25% and a month-on-month growth of 13.08%; the net profit attributable to parent was 1.537 billion yuan, with a year-on-year growth of 35.67% and a month-on-month decrease of 13.27%; the net profit deducted from non-parent was 1.408 billion yuan, with a year-on-year growth of 29.17% and a month-on-month decrease of 28.96%. Performance met expectations.

Shipments continue to grow, silicon wafer + N-type self-supply rate continues to increase. 2023Q1-3 module shipment is about 45- 46GW, with a year-on-year growth of about 68%;2023Q3 shipment is 18.5GW, confirmed receipt exceeds 16GW, with a year-on-year growth of more than 52%/ring increase of 33%+; among them, silicon wafer self-supply is less than 4GW, benefiting from N-type promotion + silicon wafer self-supply, and the net profit per watt is estimated to be about 11 points, which is flat compared with the previous month. According to Q4 of 2023, it is estimated that the component shipment is 20GW+, and the silicon wafer self-supply is about 7GW, accounting for further increase; the annual shipment is 65-70GW, the US shipment is expected to be 4- 5 GW, and the N-type shipment is about 10GW; it is estimated that the shipment will exceed 100GW in 2024, and the N-type will account for 70%+60% of silicon wafer self-supply, continuously supporting the profit.

Optical storage synergy, distributed and support multiple growth. Company 2023Q1-3 distributed shipments of about 6.7GW, of which Q3 shipments exceeded 2GW, confirmed sales of 2.5GW (Equity shipment is about 1.8GW), with an annual increase of about 25%; The price of beneficiary components is downward, and the profit per watt is about 18-19 points, basically flat compared with the previous month; It is estimated that 10GW (equity is about 7.4GW) will be developed in the whole year, and 40-50% growth will be maintained in 2024; The shipment of Q1-3 is 5.6GW, accounting for more than 50% of tracking, and the shipment of Q3 in 2023 is 2.3GW; The annual shipment is expected to be about 8GW, with an increase of 40-50% in 24 years. Energy storage 2023Q1-3 shipments slightly less than 1GWH, 2023Q3 slightly loss, estimated annual shipments of 2-3GWh; existing 12GWh capacity built, 2024Q1 another 14GWh cell + system capacity put into production, then reach 26GWh scale, 2024 shipments to maintain a high increase, 2028 target global top three. Light storage collaboration, business diversification and high growth.

Production capacity integration expansion, overseas layout started. The proportion of silicon wafers of the company has increased. It is estimated that the silicon wafer/battery/module production capacity will reach 50/75/95GW by the end of 2023, and the self-supplied silicon wafers will reach 15GW-20GW. By the end of 2024, 70/90/135GW is expected to exceed 60GW. The self-supplied thickened module profit will be improved. Overseas, the company laid out 6.5GW integrated production capacity in Southeast Asia +5GW modules in the United States to promote the continuous growth of sales in the United States; in October, the company signed a memorandum of cooperation, intending to invest and build 50,000 tons of silicon materials +30GW crystalline silicon wafers +5GW battery modules in United Arab Emirates, which will be constructed in three phases; strategic global layout, aiming at the subsequent overseas market development.

Profit forecast and investment rating: Based on the rapid decline of industrial prices, we lowered our profit forecast. It is estimated that the net profit attributable to the parent company from 2023 to 2025 will be RMB 7/85/10 billion (previous value is 75/95/116), with a year-on-year growth of 90%/21%/19%. With reference to the valuation of comparable companies in the industry, we will give 12 times PE in 2024, corresponding to the target price of RMB 46.7, and maintain the "Buy" rating.

Risk hint: the policy is not as expected, the competition is intensified, and the fluctuation price of the industrial chain is higher than expected.