Event: The company released its report for the third quarter of 2023. The first three quarters of 2023 achieved operating income of 81,119 billion yuan, an increase of 39.38% over the previous year, and net profit of 5.077 billion yuan, an increase of 111.34% over the previous year. In 2023, Q3 achieved operating income of 31.736 billion yuan, an increase of 41.25% over the previous year, and net profit of 1,537 billion yuan, an increase of 35.67% over the previous year.
Production capacity is growing rapidly, and the global and integrated layout is deepening. During the reporting period, the company gave full play to its global brand and channel advantages, as well as its strong position in the distribution market, and achieved rapid growth in the photovoltaic products business. The company is optimistic about global module demand and is actively globalizing and integrating production capacity. It lays out a large vertically integrated base in the UAE, including 50,000 tons of high-purity silicon, 30 GW crystalline silicon wafers and 5GW battery modules. It is estimated that by the end of 2023, the company's silicon wafer production capacity will reach 50 GW; the battery production capacity will reach 75 GW, of which the N-type battery production capacity will reach 40 GW; and the module production capacity will reach 95 GW.
Brand and channel advantages are highlighted, N-type share and silicon wafer self-supply rate have increased, and comprehensive costs are expected to decline.
During the reporting period, the company gave full play to its global brand, channel advantages and competitive advantage in the distribution market, and rapidly promoted the development of the photovoltaic product business. Shipments of photovoltaic modules, brackets and distributed systems all increased significantly compared to the same period last year. At the same time, the company has gradually released the production capacity of its own N-type silicon wafers, and the sales share of N-type TopCon module products has also increased significantly. The two will jointly promote a further reduction in the overall cost of the company's component products. Through continuous R&D investment and process improvement, the company's i-TopCon battery mass production efficiency and module mass production power have reached industry-leading levels.
Product+solution dual drive, photovoltaic+energy storage integration. During the reporting period, the company further expanded its energy storage product line and continued to expand its domestic and overseas market share. The company's energy storage product shipments increased significantly compared to the same period last year. In the next 5 years, the company will place equal importance on the energy storage business and the photovoltaic business, and actively promote the collaborative development of the company's large storage and household storage business. In terms of production capacity, it is expected that by the end of 2023, the production capacity of the company's energy storage batteries, DC battery cells, and AC/DC product portfolio will reach 12 GWh. By the end of the second quarter of 2024, this production capacity will be further increased to 25 GWh. The energy storage and photovoltaic business have a high degree of user overlap, and the company has obvious brand, channel and global advantages in the sales of photovoltaic products, which is conducive to promoting the integration of photovoltaic+energy storage.
Profit forecasts and investment ratings. We expect the company's net profit from 2023-2025 to be 69.2/77.0/99.5 billion yuan respectively, corresponding to PE 9.6/8.6/6.7 times. We maintain our “buy” investment ratings for companies.
Risk warning: PV demand growth falls short of expectations; capacity expansion progress falls short of expectations.