Event: The company released its 2023 performance forecast. In 2023, the company achieved net profit of 40.35 to 4.211 billion yuan, a year-on-year increase of 15%-20%; net profit after deducting non-return to mother was 25.60-2,830 billion yuan, a year-on-year change of -5% to +5%. On a quarterly basis, 23Q4 achieved net profit of 611-786 million yuan, a year-on-year decline of 7%-28% and a month-on-month decline of 38%-52%; net profit after deducting non-return to mother of 405-675 million yuan, a year-on-year change of -22% to +30%, and a decrease of 25%-55% month-on-month. The 23Q4 company accrued equity incentive expenses of about 720 million yuan. If added back, 23Q4 achieved net profit to mother of 1,31-1,506 million yuan, an increase of 5%-18% over the previous month; net profit deducted from non-mother was 1,125-1,395 billion yuan, an increase of 25%-55% over the previous month. The overall performance of 23Q4 results was in line with expectations.
23Q4 power storage shipments increased month-on-month, and the power market share continued to increase. We expect the company's 23q4 power storage shipments to be about 18 GWH, +23% month-on-month, of which 9 GWh each. We expect the company's annual power storage battery shipments to be about 54 GWh, +84% year over year, of which power is about 29 GWh, +56% year over year, and energy storage is about 25 GWh, +133% year over year. According to SNE data, the company's global power battery installed capacity from January to November 23 was about 13.4 GWh, +131.9% year on year, 2.1% market share, and +0.8 pct year on year, ranking 9th in the world. The company's square ternary and lithium iron production capacity was put into operation one after another in '23, and the total power storage capacity exceeded 100 GWh. With the increase in downstream demand and the release of the company's production capacity, we expect the company's power storage shipments to reach 80 GWh in '24.
Profitability performance was excellent, and repurchases showed confidence in development. We estimate that the company's 23Q4 power energy storage contributed about 7-8 billion yuan in net profit, with a net profit per unit of about 0.04 yuan/Wh, a slight increase over the previous month. We expect the increase in the company's capacity utilization rate combined with the decline in raw materials. Looking ahead to 24 years, considering the combined impact of price cuts and increased capacity utilization, the net profit per unit is expected to be 0.03-0.04 yuan/Wh. The company plans to repurchase 1-2 billion yuan of shares, demonstrating the company's management's confidence in the company's long-term development.
Investment advice: Taking into account the company's product price reduction and production capacity, we expect the company to achieve net profit of 41.25/46.59/60.0 billion yuan in 2023-2025, +17.6%/+12.9%/+28.8% over the same period last year, corresponding EPS of 2.02/2.28/2.93 yuan, maintaining the “buy” rating.
Risk warning: downstream demand falls short of expectations; SMORE's performance falls short of expectations; industry competition intensifies.