In 2023Q3, the company achieved net profit of 45 million yuan, +67% over the same period last year. In 2023Q3, the company achieved revenue of 755 million yuan, +60% y/y and +2%; realized net profit of 45 million yuan, +67%, +22%; net profit of 44 million yuan, +87%, +23%; gross margin was 13.2%, +3.7pcts, +1.5pcts; net sales interest rate was 5.9%, +0.2pcts yoy, +0.9pcts month-on-month. In the first three quarters of 2023, the company achieved revenue of 2,046 billion yuan, +42% year-on-year; net profit of 118 million yuan, +56% year-on-year; gross margin of 12.6%, +1.1 pcts; and net sales profit margin of 5.8%, +0.5pcts year-on-year.
The company's convertible bonds were successfully issued, and production expansion plans are progressing steadily. The company successfully issued “Yubang Convertible Bonds” and raised 500 million yuan for the company's 20,000 ton photovoltaic welding belt production expansion project and additional working capital. We expect that by the end of 2023, the company will have a production capacity of about 40,000 tons of photovoltaic welding tape and achieve product sales of more than 30,000 tons. The steady progress of the production expansion plan is conducive to enhancing the company's order acceptance and delivery capabilities. SMBB, 0BB, low temperature lead-free welding tape, etc. in the new production line will help the company optimize its own product structure and further benefit from the N-type battery iteration.
New welding tape products have created technical barriers, and the profitability of N-type demand shipments has increased. In 2023, the pace of N-type components replacing P-type components accelerated markedly. N-type production capacity represented by TopCon, including HJT and XBC, was released one after another, and market demand for new welding tape products continued to increase. As a leading enterprise in the welding belt industry, the company's MBB, SMBB, and 0BB welding tape technology layout is relatively early. At the same time, mass production of low-temperature welding belts, special-shaped welding belts, and customized confluence belt products suitable for N-type batteries such as HJT and XBC has also begun mass production, starting supply to leading component companies, and has a certain first-mover advantage. Products such as 0BB and low temperature welding tape have high certainty in the HJT cost reduction path, have certain technical barriers and premium capabilities, and provide a guarantee for the company's future performance growth.
Risk warning: risk of SMBB welding tape and other new products falling short of expectations; risk of production capacity not meeting expectations; risk of increased industry competition; risk of companies falling short of expectations.
Investment advice: Lower the profit forecast and maintain the “increase in holdings” rating. Considering the recent sharp drop in component prices and the impact of profit-side pressure on upstream auxiliary materials prices, we lowered the company's profit forecast. Net profit for 2023-2025 is expected to be 1.78/2.50/317 million yuan (original forecast was 2.49/3.68/460 million yuan), +77/+41/ +27% year on year, and EPS was 1.71/2.41/3.05 yuan (original forecast was 2.40/3.54/4.42 yuan), corresponding to the current dynamic PE was 27/19/15 times, maintaining “growth” “Keep” ratings.