Incidents:
The company released its report for the third quarter of 2023. In the first three quarters of 2023, the company achieved operating income of 2,008 billion yuan, a year-on-year increase of 78.85%, net profit of 85 million yuan, a year-on-year increase of 68.23%, a year-on-year increase of 65.73%, a year-on-year increase of 65.73%, a gross profit margin of 17.47%, a year-on-year decrease of 0.81pct, and a net profit margin of 4.66%, a year-on-year decrease of 0.08pct.
In 2023Q3, the company achieved operating income of 974 million yuan, an increase of 151.89% over the previous year, and net profit of 46 million yuan, an increase of 157.01% over the previous year.
reviews
The power distribution+photovoltaic business is developing rapidly, and energy storage has entered a harvest period. The company's revenue has increased quarterly since this year, with impressive performance in all three businesses. 2023Q1-Q3 revenue was 430/6.04/974 million yuan respectively, up 30.82%/48.30%/151.89% year on year. Looking at the business structure, in the distribution business, revenue in the first three quarters increased by 87% year on year, of which bus revenue increased 107% year on year (bus revenue in the first half of the year increased 20% + year on year), mainly in the customer industry; the new photovoltaic materials business, revenue in the first three quarters increased 149% year on year. Among them, photovoltaic welding tape revenue increased 174% year on year (50% + year on year in the first half of the year), and the share of SMBB welding tape shipments increased to 50%. It is expected that the company's new photovoltaic welding tape production capacity will gradually launch, compounded by strong demand for photovoltaic and downstream photovoltaics N Due to a sharp increase in demand for SMBB batteries; the energy storage business, energy storage systems achieved revenue of 170 million yuan in a single quarter (energy storage subsidiary Viteng Energy Technology achieved revenue of 20.39 million yuan in the first half of the year). The explosive growth in the energy storage business is expected to be mainly due to the company's order revenue confirmation and smooth development of downstream customers. We believe that the company is based on the power distribution business and relies on the two major businesses of photovoltaics and energy storage as incremental business, and is expected to continue to provide a stable basic market and sufficient growth momentum for the company's development in the future.
Profit is stable and cost control is effective. The company's gross margin for the third quarter was 17.87%, up 0.04pct month-on-month, net profit margin 5.17%, up 0.47pct from month to month. Profit levels showed a quarterly upward trend. It is expected that the main factors are: first, the revenue share of products with higher gross margins, such as SMBB and low temperature welding belts, and second, effective cost control. The cost rate during the third quarter was 10.45%, down 1.82 pct year on year, reflecting the remarkable results of the company's fee reduction and efficiency measures.
Profit forecast: The busbar business is growing steadily, and the welding belt business is expected to gradually increase its share in the iteration of new technologies. The energy storage business is expected to fully enjoy the dividends of industry development, driving the company to maintain rapid growth. We expect the company to achieve net profit of 1.12/ 2.02/ 2.99 yuan from 2023-2025, corresponding to PE 24/ 13/ 9 times. PE was valued at 15 times the 2024 profit, with a target price of 19.4 yuan to maintain the “buy” rating.
Risk warning: downstream demand falls short of expectations, profit forecasts and valuation judgments fall short of expectations.