Event: On October 24, 2023, the company released its three-quarter report for 2023. The first three quarters of 2023 achieved revenue of 28.017 billion yuan, +33.27% year-on-year; realized net profit of 1,279 billion yuan, +71.18% year-on-year; and realized net profit of 1,571 billion yuan, +104.1% year-on-year. 2023Q3 achieved revenue of 10.41 billion yuan in a single quarter, +23.84% yoy and -3.87% month-on-month; realized net profit of 418 million yuan, +72.29% year-on-year and -23.99%; and realized net profit deducted from the mother of 733 million yuan, +149.09% year-on-year and +29.03% month-on-month.
The ruling on the contract dispute was released, and full payment was completed in Q3. The company's Q3 non-recurring profit and loss amount was about 315 million yuan, which had a significant impact on the company's net profit. Mainly because the International Court of Arbitration of the International Chamber of Commerce ruled on the component supply contract dispute between the company and FOCUS, the company calculated the full amount of US$72 million, equivalent to RMB 514 million, based on the ruling amount.
The volume of components has risen sharply, and the mass production process of heterojunction has accelerated. 2023H1 has shipped 8.37 GW of components. It is estimated that Q3 module shipments will exceed 6 GW, and component shipments will continue to grow steadily throughout the year. The company's Malaysian plant continues to supply components to the US, driving an increase in overall profitability through premiums in overseas markets. Q3 The company's gross margin for the single quarter was 17.43%, +7.07pct year over year and +3.31 pct month-on-month. In terms of technology routes, the company has firmly chosen a heterogeneous route, and industrialization is progressing smoothly. On August 13, the first 15GW (phase I) heterojunction module at the company's Ninghai Nanbin base was successfully rolled off the line, and the first batch of heterojunction modules was shipped on September 4. The next day, it was announced that a 200MW supply framework agreement was signed. The company has obvious advantages in technology and market share on the heterojunction circuit, and is looking forward to the increase in photovoltaic module performance brought about by the release of heterojunction production capacity.
The profit of silicon materials is under pressure, and energy storage continues to gain strength. (1) Silicon materials business: Prices in the photovoltaic industry chain plummeted sharply in 2023. The gross profit margin of 2023H1's silicon materials was 45.59%, a year-on-year decrease of 14.25pct. Q3 The price of silicon materials continues to be low, and it is expected that the profitability of the company's silicon business will narrow further. (2) Energy storage business: In September 2023, the company's holding subsidiary Ningbo Shuangyili 1750KW energy storage PCS was delivered to overseas markets for the first time, becoming an important milestone in the 3S (BMS/PCS/EMS) product development strategy. The company's energy storage business has a high export ratio, can fully enjoy the scissor difference between supply chain costs and overseas sales prices, and maintains a high level of profitability.
Investment suggestions: The company is expected to achieve operating income of 38.496 billion yuan, 47.527 billion yuan and 57.859 billion yuan respectively in 2023-2025, and realized net profit of 1,824 billion yuan, 2,430 billion yuan and 3,052 billion yuan respectively, with a year-on-year increase of 93.1%, 33.3% and 25.6%. The corresponding EPS is 1.6, 2.13, and 2.68, respectively, and the PE multiples corresponding to the current stock price are 10.9X, 8.2X, and 6.5X, respectively, maintaining the “increase in holdings” rating.
Risk warning: downstream demand falls short of expectations; industry competition intensifies; projects under construction are progressing less than expected; upstream raw material prices are rising; HJT's new technology development falls short of expectations, etc.