The company published three quarterly reports. In the first three quarters of 2023, the company achieved revenue of 2,691 million yuan (+17.75%), net profit of 83 million yuan (+39.96%), net profit of 64 million yuan (+63.81%), net profit of 64 million yuan (+63.81%); in the third quarter, the company achieved revenue of 1,004 billion yuan (+23.09%), net profit of 44 million yuan (+170.56%), net profit of 32 million yuan (+173.80%).
The release of production capacity helped increase revenue, improved gross margin, optimized expenses, and achieved significant profit growth.
The company's revenue in the first three quarters maintained a rapid growth trend. We believe this is related to the rapid release of production capacity for the deep processing project of the company's Anhui branch. At the same time, the company's customer orders also guaranteed revenue growth. In the first three quarters of 2023, the company's gross margin was 7.85%, up 0.29pct year on year. Among them, Q1-Q3 single-quarter gross margin was 6.88%, 7.66%, and 8.81%, respectively, and Q3 single-quarter gross margin increased 0.72 pct year-on-year. We believe that the increase in gross margin is related to the increase in the price of photovoltaic glass and the increase in the scale effect of increasing the company's production capacity. Looking at the cost ratio, the company's sales, management, R&D, and financial expenses in the first three quarters were 0.16%, 1.63%, 2.54%, and 0.30% respectively. Except for the 0.01pct increase in sales expenses, the rest declined; the third quarter was 0.13%, 1.46%, 2.35%, and 0.49%, respectively, with year-on-year changes of -0.03pct, -0.18pct, -1.02pct, +0.40pct, and the cost control effect improved markedly. With the increase in gross margin and the strengthening of expense ratio control, the company's profit level has improved markedly.
Continue to expand production capacity to improve product structure and seize market opportunities. The company continues to promote the expansion of production, construction and commissioning of large-size and thin photovoltaic glass. The company is the first company in the industry to develop ultra-thin photovoltaic glass with a thickness of 1.6 mm. It has passed core customer certification and has supplied related products to customers in batches. In the first three quarters, against the backdrop of increasingly fierce competition for homogenization of photovoltaic products, the company's 1.6mm ultra-thin photovoltaic glass sales continued to grow at a high rate, confirming the competitive advantage of the company's differentiated products.
Investment suggestions: The company's revenue for 2023-2025 is estimated to be 37.39, 4.6.36 and 5.609 billion yuan respectively, and net profit of 1.02, 1.48 and 193 million yuan respectively, corresponding to PE of 54.08, 37.22 and 28.45 times, respectively. First coverage, giving a “buy” rating.
Risk warning: Downstream PV installations fall short of expectations, increased industry competition, etc.