Event: The company released its report for the third quarter of 2023. The first three quarters of 2023 achieved operating income of 48.654 billion yuan, a year-on-year decrease of 2.39%, and net profit of 6.188 billion yuan, an increase of 23.75% over the previous year. In 2023, Q3 achieved operating income of 13.756 billion yuan, a year-on-year decrease of 24.19%, and net profit of 1,652 billion yuan, a year-on-year decrease of 20.72%.
Falling prices in the industrial chain have improved economic efficiency, driven a steady rise in terminal installations, and sufficient confidence in long-term development.
Falling prices have stimulated investment demand, and centralized projects such as large bases have been launched; energy shortages have stimulated installed capacity growth, and overseas emerging markets such as Africa and the Middle East have increased significantly. Driven by favorable factors such as the continuous decline in the cost of photovoltaic power generation and the global green economy, the new installed capacity of global photovoltaics will continue to grow steadily in the medium to long term, and is expected to exceed 400GW. The company announced a share repurchase plan. The plan is to repurchase 5-10 billion yuan of the company's shares within 12 months after review and approval by the board of directors for future equity incentives or employee stock ownership plans, demonstrating the company's confidence in performance fundamentals and long-term development.
In the downturn cycle, the imbalance between supply and demand and competition intensifies, and technological innovation and manufacturing transformation provide endogenous competitiveness. The company has implemented a five-year rolling development strategy plan, adhered to technological innovation and Industry 4.0 transformation, and achieved resilient growth in performance. In terms of silicon wafers, the dominant production capacity scale of G12 and N types continued to increase, and the production and sales scale increased 68% year-on-year in the first three quarters of 2023. In addition, the “Deep Blue” +AI fixed model has been developed to customize “solutions” to meet the high quality, differentiated and flexible needs of customers. Currently, more than 1000 types of full-specification silicon wafer products have been supplied, leading the industry. In the battery sector, the copper process further reduces costs and increases efficiency, and the TopCon project plans to upgrade to TBC batteries. The component process realizes a comprehensive iteration of the “G12+ Overlay” 3.0 product. Guangzhou 25GW Solar Cell Industry 4.0 Smart Factory introduces G12's large technology advantages and collaborates with the entire “G12+N type+laminated tiles” industry chain.
Pay attention to global cooperation and talent development, and expand the advantages of “differentiation” and “globalization” to overcome the cycle.
The company adheres to the construction of a people-centered olive-type organization, and responds to cross-regional and international challenges through unified concepts, business science, and coordination. In May '23, the company and Vision Industries pioneered cooperation to build a local photovoltaic industry chain in Saudi Arabia, with a target production capacity of 20 GW in the first phase. The cumulative shipment volume of IBC batteries from the subsidiary Maxeon exceeds 10GW; the photoelectric efficiency of the Maxeon 7 module reached a world high of 24.7%. Currently, the company's global business layout is improving, maintaining long-term and stable cooperation with customers in Europe, South Korea, Southeast Asia, etc., and the supply chain relationship is good.
Profit forecasts and investment ratings. We expect the company's net profit from 2023-2025 to be 75.9/81.9/11.33 billion yuan respectively, corresponding to PE 10.2/9.5/6.9 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.