Key points of investment
Incident: The company announced its 2023 performance forecast. Net profit for 2023 is expected to be 354 million yuan, an increase of 697%; net profit after deducting non-return to mother is estimated at 313 million yuan, an increase of 2271%. Among them, 2023Q4 net profit is expected to be 197 million yuan, an increase of 245%; net profit after deducting non-return to mother is estimated to be 184 million yuan, an increase of 411%. The performance exceeded market expectations.
Stent shipments increased month-on-month, the share of tracking increased dramatically, and performance exceeded expectations. 1) Shipping side: We expect the company to ship 16GW-17GW in 2023, of which the fixed bracket will be shipped 9GW and the tracking bracket will be shipped about 7.5GW; the 2023Q4 bracket will be shipped about 7GW+, of which the tracking shipment will be about 4GW, which has doubled more than expected; fixed shipments of 3GW+, an increase of 50% +, mainly due to multiple orders from India, Saudi Arabia and other places being delivered in Q4. The price of the superimposed tracking bracket is about 0.2 yuan/w, and the Q4 revenue exceeds expectations. 2) Profit side: Benefiting from the company's self-made rotary drives, galvanizing, etc. cost reduction +Q4 capacity utilization rate increased to 100% + tracking share and high overseas share, we expect gross margin to improve month-on-month in 2023Q4, and we expect a steady increase in gross margin in 2024.
Ongoing orders are abundant, and the high growth rate is expected to continue in 2024. By the end of December 2023, the company's on-hand orders were about 4.7 billion yuan (3.6 billion yuan for tracking bracket+1 billion yuan for fixed bracket+100 million yuan for others), a decrease of 25% compared to the current order of 6.3 billion yuan in 2023Q3, mainly for order delivery in Q4. Assuming that the tracking and fixed prices are 0.45 yuan and 0.23 yuan respectively, the company has on-hand orders of about 12 GW (tracking 8 GW+ fixed 4 GW+), mainly overseas orders, which are expected to support continued high growth in 2024.
Profit forecast and investment rating: Based on the company's performance exceeding market expectations, we adjusted the company's 2023-2025 net profit of 3.5/5.2 billion yuan (2.8/49/70 million before 2023-2025), up 697%/48%/30%. Considering that the company has plenty of orders in hand and the performance is expected to continue to increase, we gave 24 times 25 times PE, corresponding to a target price of 96 yuan, and raised it to a “buy” rating.
Risk warning: Policies fall short of expectations, increased competition, etc.