Key points of investment
Incident: The company's net profit to mother in 2023 was 52.7-5.83 billion yuan, up 43.27% ~ 58.36%; net profit of 54.7-6.04 billion yuan, up 57.83% to 74.44%, of which Q4 net profit to mother was 195-750 million yuan, down 41.27% ~ 84.70%, down 51.17% ~ 87.28%, median value of 473 million yuan; after deducting non-net profit of 344%-925 million yuan, a decrease of 24.45% to 71.47% and a year-on-year decrease of 34.28% to 75.18%.
Component prices dropped rapidly, and performance fell short of expectations.
Shipments continue to grow, competition intensifies, and short-term profits are under pressure from accrued impairment. In 2023, module shipments exceeded 65 GW, an increase of more than 51%; Q4 shipments were about 20 GW (confirmed receipt of about 18 GW), an increase of 54%/increase of 23%; US shipments were 1 GW+; due to the sharp decline in module prices, we estimated the net profit per watt was about 5-6 points, and the environmental reduction was about 6 points. Looking at 2024, we expect to ship 15-18GW of Q1 modules, 90-100GW for the whole year, and 7-8GW for the US. Type N accounts for 70% +60% of silicon wafers, which will continue to support profits.
Optical storage collaboration and diversified growth space can be expected. The company distributed shipments in 2023 were about 9-10 GW, of which Q4 shipped about 3 GW, confirming sales of 2 GW (equity shipment about 1.5 GW); the price of beneficiary components declined, and the profit per watt was about 2 gross, which was basically the same month over month; we expect to maintain 40-50% growth in 2024; stents shipped 9-10GW in 2023, accounting for more than 50% tracking; Q4 shipped 4GW, with a profit of about 1 percent per watt; we expect 40-50% increase in 2024. Energy storage shipped about 2 GWh in 2023, resulting in a loss of profit; the current 12 GWh production capacity was built, and the 2024Q1 was put into operation with an additional 14 GWh battery and system production capacity. At that time, it will reach 26 GWh. Shipments will maintain a high increase in 2024, and target the top three in the world in 2028. Optical storage collaboration, diversification and high growth in business.
Integrated expansion of production capacity and launch of overseas layout. The company's production capacity of silicon wafers/batteries/modules will reach 50/75/95GW by the end of 2023; 70/90/135GW by the end of 2024, we expect to exceed 60 GW from silicon wafers, making thickened modules profitable. In terms of overseas production capacity, the company plans 6.5 GW integrated production capacity in Southeast Asia plus 5 GW modules in the US to lay out the US high-end market; the company intends to invest 50,000 tons of silicone+30GW crystalline silicon wafer+5GW battery modules in the UAE, to be built in three phases; and a strategic global layout for subsequent overseas market development.
Profit forecast and investment rating: Based on the company's performance falling short of expectations, we lowered our profit forecast. The company's net profit for 2023-2025 is estimated to be $55/57/70 billion yuan (the value before 2023-2025 was $70/85/10 billion), an increase of 50%/3%/23%, maintaining the “buy” rating.
Risk warning: increased competition, policies falling short of expectations, etc.