Items:
The company publishes three quarterly reports for 2023. 2023Q1-3 realized operating income of 4.641 billion yuan, year-on-year + 11.39%; net profit of 752 million yuan, + 6.84%; deduction of non-parent net profit of 772 million yuan, + 8.20%; and comprehensive gross profit margin of 35.81%, year-on-year + 2.21pct. 2023Q3 achieved operating income of 1.39 billion yuan, year-on-year-19.41%, month-on-month-12.91%; return-to-mother net profit of 124 million yuan, year-on-year-59.26%, month-on-month-58.96%; deduction of non-return net profit of 125 million yuan, year-on-year-63.77%, month-on-month-62.76%; comprehensive gross profit margin 33.65%, year-on-year-3.13pct, month-on-3.11pct.
Comments:
Under the influence of exchange losses and equity incentive fees, the expense rate during the company period increased significantly compared with the previous year. The period expense rate of 2023Q3 company is 25.37%, with a month-on-month ratio of + 11.75pct. Among them, 2023Q3 financial expenses increased by 110 million month-on-month, the financial expense rate was 6.26%, and the month-on-month ratio + 7.73pct was mainly due to exchange losses. 2023Q3 management expense rate is 7.19%, month-on-month + 2.91pct, mainly due to the influence of equity incentive amortization expenses.
Dragged down by European inventory, the company's inverter shipments declined in the third quarter compared with the previous quarter. According to the latest export data released by the General Administration of Customs in September, China's inverter exports have shown a month-on-month decline for four consecutive months. The high inventory of European inverters during the summer vacation affects the installed capacity and drags down the inverter shipments, making the company's revenue decline compared with the previous month. The decline in inverter exports has narrowed in September, and with the gradual demise of European inventories and the development of emerging markets such as Asia, Africa and Latin America, the company's inverter shipments are expected to improve in the fourth quarter and next year.
The business of power station is developing rapidly. (1) New energy power production business: the distributed photovoltaic power stations invested and operated by the company include industrial and commercial distributed photovoltaic power stations and household distributed photovoltaic power stations, which usually adopt the power sales mode of "self-generation and self-use, surplus power grid" and "full power grid" respectively, and sell the produced electricity to terminal enterprise customers and power grid companies and other power demanders to achieve revenue. Benefiting from the high prosperity of distributed photovoltaic, the company's power generation business is developing rapidly. (2) Household photovoltaic system business: the company provides power generation related services such as household distributed photovoltaic power station design, installation, management, operation and maintenance for residents, and obtains related service income.
Since April 2019, the company has established a wholly-owned subsidiary Jinlang Wisdom to specialize in the development, investment, operation and maintenance of distributed photovoltaic power stations. It is expected to cooperate with inverter business to achieve further growth.
Investment advice: with the gradual digestion of European inventory and the development of markets in Asia, Africa and Latin America, the company's shipments are expected to be improved. Taking into account the impact of European inventory on the company's shipments, we adjust the profit forecast and estimate that the company's return net profit from 2023 to 2025 will be 9.82 million yuan respectively (the previous value is 2.181 billion yuan), and the current market capitalization corresponding to PE is respectively times that of 28-18-13. Considering the valuation of comparable companies, we will give 22xPE in 2024, corresponding to the target price of 86.66 yuan, and maintain the "recommended" rating.
Risk tips: the supply of raw materials is tight, the progress of capacity expansion is not as expected, market competition intensifies, and so on.