The company's performance grew rapidly, and its profitability improved markedly
In the first three quarters of 2023, the company achieved operating income of 9.741 billion yuan, an increase of 27.77%; net profit of 484 million yuan, an increase of 40.94%; and a gross profit margin of 16.93% and a net profit margin of 5.64%, mainly due to the rapid development of China's photovoltaic industry and the continued high demand for photovoltaic products and terminal services. 2023Q3 achieved operating income of 3,980 billion yuan, up 33.27% year on year, up 30.36% month on month; net profit of 247 million yuan, up 120.27% year on year, up 84.63% month on month; realized gross profit margin 19.50%, up 6.10 pct month on month, net profit margin 7.47%, and 2.93 pct over month. The company's sales scale was further expanded, and both revenue and profit increased significantly.
Continuously increasing R&D efforts, TopCon battery technology continues to break through in R&D, and the company continues to increase R&D efforts. At present, the company has deployed TopCon2.0 0BB patented technology that consumes less silver paste and can match thinner silicon wafers, which is conducive to further cost reduction and efficiency of the company's battery products. Currently, the company's high-efficiency battery mass production lines are all N-type TopCon batteries. As of August 2023, the average conversion efficiency of the company's N-type TopCon 16BB main grid battery mass production reached 25.5%, and the company's N-type battery mass production technology level and conversion efficiency rank among the highest in the industry. In addition, the company continues to optimize the technical indicators of module products, so that the N-type TopCon battery module has advantages such as high efficiency, high duplex ratio, and low attenuation.
Continue to promote production capacity construction, and implement new production capacity in an orderly manner
In terms of production capacity, the company is actively promoting capacity expansion. As of September 2023, the first phase of the company's 16GW high-efficiency monocrystalline battery intelligent factory project has been put into operation, and the equipment for the second phase of the 8GW project is gradually entering and installing. As of June 2023, the company's TopCon battery production capacity reached 2.75GW. The company also continues to accelerate work on a general-purpose photovoltaic backplate project with an annual output of 250 million square meters. As of June 2023, the company's backplane production capacity reached 1.75 GW, and the cumulative backplane product delivery volume reached 240 GW. In addition, the company continues to plan and lay out the upstream silicon business. As of September 2023, the company has completed the establishment of a new project company with an annual output of 200,000 tons of industrial silicon and an annual output of 100,000 tons of high-purity polysilicon. The project is in the third party evaluation stage of preliminary approval procedures.
Profit forecasting and valuation
Lower the profit forecast and maintain the “increase in holdings” rating. The company is the leader in the backplane and TopCon battery sector. Considering that there are many TopCon expansion projects in the 2023-2024 industry, there is a possibility that TopCon battery module product premiums will decrease, we have lowered the company's profit forecast. The company's net profit forecast for 2023-2025 is estimated to be 7.10, 10.05, and 1,301 billion yuan respectively (10.53, 13.59, and 2,099 billion yuan respectively before the reduction), corresponding to EPS of 0.65, 0.92, 1.19 yuan/share, PE 16.92, 11.96, and 9.24 times, maintaining the “increased holdings” rating.
Risk warning: Battery and backplane production expansion fell short of expectations; industrial chain prices fluctuated greatly; raw material prices rose; market competition increased the risk.