Key points of investment:
Performance summary: The company announced 23Q3 results. The first three quarters of 23 years achieved operating income of 4.64 billion yuan, +11.4%, net profit of 750 million yuan, net profit of 750 million yuan, net profit of 770 million yuan, net profit of 770 million yuan, and net profit of 770 million yuan, +8.2% year-on-year; of these, Q3 achieved operating income of 1.39 billion yuan, -19.4%, net profit of 120 million yuan, year-on-year, -63.8%. The company's overall performance in 23Q3 fell short of expectations due to the removal of overseas channels, increased equity incentive costs, and exchange losses.
Due to the removal of warehouses from overseas channels, the overall shipment of inverters is under pressure. We expect 23Q3 to ship 130,000 grid-connected inverters, a decrease of about 10% over the previous month; household storage inverters will ship about 10,000 units, a decrease of 50%-60% over the previous month, mainly due to factors such as the fact that European household storage inventories are still being digested and summer vacations affect installation. Looking forward to the future, we expect the company's Q3 household storage and shipping to be the worst quarter, and it is expected that it will improve quarterly as overseas inventories are removed.
Due to equity incentives+exchange losses, the fee rate increased month-on-month during Q3. The company's period expense rate for the first three quarters of 23 was 22.7%, year over year +3.9pct; 23Q3 period fee rate was 25.4%, year over year +12.1 pct, +11.8 pct month over month. Sales/management/ R&D/financial expense rates were 6.3%/7.2%/5.7%/6.3%, respectively, +0.1/+2.9/+1.0/ +7.7pct over month. Among them, the increase in management expenses was mainly due to the company's implementation of equity incentive plans. The increase in the financial expense ratio was mainly due to exchange rate fluctuations The impact is estimated to be due to an exchange loss of 100 million yuan.
Profit forecast: Considering the declining shipping expectations of the inverter business and the intense competition in the industry, we lowered the company's 2023-2025 profit forecast. It is estimated that the net profit of the mother in 2023-2025 will reach 10.1/16.2/22.4 billion yuan (previous value: 16.4/22.8/30.1 billion yuan), corresponding to PE 26.9/16.8/12.1 times, giving 18 times PE in 2024, corresponding to the target price of 72.60 yuan, maintaining the “buy” rating.
Risk warning: demand falls short of expectations, overseas trade frictions escalate, and industry competition is fierce.