Events:
On October 30, 2023, the company released the third quarter report of 2023. During the Q3 reporting period, the company realized operating income of 1.004 billion yuan, an increase of 23.09% over the same period last year, an increase of 14.40% over the previous year, and a net profit of 44 million yuan, an increase of 170.56% over the same period last year and 87.33% over the previous year. From the beginning of the year to the end of the reporting period, the company achieved operating income of 2.691 billion yuan, an increase of 17.75% over the same period last year, and a net profit of 83 million yuan, an increase of 39.96% over the same period last year. The company's performance improves quarter by quarter, business operation tends to be sound, under the steady-state competition mode of the industry, the technological advantage is gradually highlighted.
Q3 cash flow significantly improved, photovoltaic glass shipping structure optimization Q3 during the reporting period, the company achieved sales gross profit margin of 8.81%, year-on-year increase of 0.72pct, month-on-month increase of 1.15pct, net sales profit rate of 4.56%, year-on-year increase of 2.49pct, month-on-month increase of 1.85pct, net cash flow of operating activities of 309 million yuan, from negative to positive, an increase of 48.09%. The company's Q3 photovoltaic glass shipments are about 5500 square meters, and it is expected that the annual shipments will exceed 180 million square meters, an increase of about 30% over the same period last year, of which 1.6mm photovoltaic glass shipments continue to rise, and ≤ 2.0mm photovoltaic glass shipments are expected to account for more than 80% of the annual shipments. The company took the lead in developing 1.6mm ultra-thin photovoltaic glass in the industry, and has passed the core customer certification and started to supply in batches. 1.6mm glass components are lighter and more suitable for distributed scenarios. Under the background of rising electricity prices and gradually active power trading, we believe that distributed demand is expected to maintain a strong state, and the company is expected to benefit significantly.
Capacity continues to expand, photovoltaic glass shipments are expected to continue to grow
The company is the leader of ultra-thin photovoltaic glass deep processing industry, with a stable supply of original glass and sufficient deep processing capacity, as well as an active layout of upstream production capacity, its parent company's subsidiary has 3 original kiln production capacity of 650t/d in Fengyang Silicon Valley, with a total capacity of 1950t/d, while another 4 1000t/d furnaces are under construction and planning and are expected to be put into production before 2025 to support the company's original film supply. In 2022, the company's Anhui deep processing production line increased the yield to achieve further climbing and release of production capacity, and superimposed the scale effect of capacity expansion to achieve a reduction in unit processing costs. at the beginning of the year, the company had a deep processing capacity of 150 million square meters. It is expected to reach 1.8-190 million square meters by the end of 2023, and is expected to reach about 230 million square meters in 2024.
Earnings forecast, valuation and rating
We estimate that the company's operating income from 2023 to 2025 will be 34.5 million yuan respectively, with a year-on-year growth rate of 8.9%, 32.7%, 39.7%, and 76.2%, 33.5%, 47.9% and 51.5%, respectively, respectively. The 3-year CAGR is 51.5%. The company is the leader in the deep processing of ultra-thin glass in China, and is expected to continue to benefit from the considerable growth of distributed installation demand at home and abroad. With reference to the comparable company valuation, we give the company 30 times PE in 2024, with a target price of 31.99 yuan, maintaining the "overweight" rating.
Risk tips: photovoltaic installation is not as expected, overseas business progress is not as expected, raw material prices fluctuate.