Introduction to this report:
The company's 23Q4 performance was slightly lower than expected, and some fund-raising projects are to be postponed. We are optimistic that the company will enter the field of new photovoltaic materials in the future and maintain an “gain” rating.
Key points of investment:
Maintain an “Overweight” rating. The 2023-2025 EPS was lowered to 0.5/0.77/1.1 yuan (the original forecast value was 0.91/1.19/1.89 yuan), taking into account the impact of the external environment, and the growth rate was -42%/54%/43%, respectively. Referring to comparable company valuations, the company was given PE40X in 2024, and the target price was lowered to 30.66 yuan.
23Q4 results were slightly lower than expected, and some fund-raising projects are to be postponed. The company announced a pre-reduction in performance. It is expected to achieve net profit from mother of 0.28 million yuan to 0.42 million yuan, -40% to -60% year-on-year; to achieve net profit of 0.27 million yuan to 0.4 billion yuan after deduction, or -35.42% to -57.53% year-on-year. Among them, 2023Q4 is expected to achieve net profit of -0.17 to -0.03 billion yuan, which is a loss over the same period last year. Affected by downstream wind power demand, the overall gross margin declined due to a decline in orders and sales prices for the company's related insulation materials products, and an increase in the share of sales of low-margin products. During the reporting period, the subsidiary Shidai Insulation's operating performance fell short of expectations, and the company plans to prepare for impairment of the goodwill and related assets involved.
At the same time, operating costs associated with the trial operation of fund-raising projects have increased. The company plans to adjust the date for some fund-raising projects to reach the intended use status from January 2024 to December 31, 2024.
The prospects for entering new photovoltaic materials are promising. We are optimistic that the company has a relatively complete insulating resin product system and strong technical industrialization capabilities, and has the advantages of “resin synthesis, pultrusion, and spraying” throughout the process: 1) Accelerate the reaction of resin during pultrusion and improve pultrusion efficiency and speed. 2) The core product groove wedge is collaborated with the composite frame process, and the competitive advantage is expected to be replicated, and the company is expected to become a leader in the segment.
Catalysts: Downstream verification is progressing smoothly; offshore photovoltaic projects are progressing beyond expectations.
Risk warning: changes in raw materials, production capacity cannot be absorbed as expected, project construction falls short of expectations, etc.