occurrences
On February 23, 2024, the company released its 2023 performance report. For the full year of 2023, the company achieved revenue of 2,851 billion yuan, +74% year on year; realized net profit of 120 million yuan, +72% year over year; realized net profit deducted from non-return mother of 107 million yuan, +61% year over year.
On a quarterly basis, 23Q4 achieved revenue of 843 million yuan, +64% year on year, -13% month on month; achieved net profit of 355.708 million yuan, +82% year over year, and -23% month on month; realized net profit without return to mother of 25.6394 million yuan, +47% year over year and -44% month on month.
Overall, the company's 23-year performance was in line with expectations. The sharp year-on-year increase was mainly due to the company's continuous increase in R&D investment and product development, strengthening sales team building, and strengthening market promotion, which led to an increase in sales of products such as high and low voltage busbars, photovoltaic welding belts, and energy storage systems.
The three major businesses go hand in hand to drive steady growth in the company's performance
Photovoltaics: The company will continue to strengthen cooperation with existing customers, expand new customers and increase business cooperation in due course. As TopCon's production capacity expansion accelerates, the company's share of SMBB welding belt shipments continues to increase, and the profitability of the company's welding belt business may increase.
Energy storage: By improving the component self-sufficiency rate of energy storage systems, the company establishes full industry chain coverage from component production to AC/DC system integration, creating cost and quality advantages in the entire industry chain layout, and enhancing the company's core competitiveness. The company has sufficient energy storage orders, and has now built a full range of energy storage system product matrices, mainly grid-side energy storage, industrial and commercial energy storage, and supported by household and portable energy storage. In terms of industrial and commercial storage, in addition to increasing the self-supply rate of components, the company will also use business sales models such as combining channels with independent development to increase market development efforts and gradually build comprehensive capabilities for integrated industrial and commercial energy storage solutions.
Power distribution equipment: The company's power distribution equipment business is mainly busbars. Due to the scale advantages of leading enterprises in the industry and the continuous improvement of industry standardization standards, the concentration of the bus industry is expected to increase further in the future. The company's bus products have excellent performance. Compared with bus products from leading overseas companies such as Schneider and Siemens, the performance is superior in some rated current ranges, and is expected to benefit from increased industry concentration.
Investment advice
The company's revenue for 24-25 is estimated to be 45.04/6.063 billion yuan, and net profit to mother is 2.01/281 billion yuan, respectively, and the corresponding PE is 11x/8x. Overall, the company's power distribution business has been developing steadily. The share of products such as SMBB and low temperature welding belts has gradually increased profits, and the energy storage business has begun to contribute revenue and maintain a “recommended” rating.
Risk warning
Downstream demand falls short of expectations, capacity construction falls short of expectations, market competition intensifies, etc.