Event: The company announced its 2023 performance report. The company achieved revenue of 113,510 billion yuan in 2023, an increase of 33.46% over the previous year, and realized net profit of 5.561 billion yuan, an increase of 51.12% over the previous year.
Among them, 2023Q4 achieved revenue of 32.391 billion yuan and net profit of 484 million yuan to mother.
The overall performance was basically in line with expectations after considering the impact of depreciation accruals. The optical storage business progressed steadily, and it is expected that excess profits will be obtained in the future through large-scale advanced production capacity and the development of overseas markets.
1) Overseas layout: Target overseas markets for global production capacity layout, and rationally plan integration ratios.
For the high-premium US market, the company plans: 1) an integrated production capacity of 6.5 GW in Southeast Asia, and its products are mainly shipped to the US; 2) the company is building a 5GW component production capacity in the US to directly supply the mainland. In addition, the company signed a memorandum of understanding with AD Ports and Jiangsu Haitou on the Tianhe Solar UAE project. The planned production capacity is 50,000 tons of silicon, 30GW silicon wafers, and 5GW battery modules, which will be built in three phases. In addition to the above plan targeting the US, the company's production capacity layout in overseas markets is also 50,000 tons of silicon, 30GW silicon wafers, and 5GW battery modules in the UAE. These layouts are designed to be global.
2) Large components: 210 components continue to receive market attention, and product shipments exceed expected targets.
Trina Solar has performed excellently in terms of market performance, and in particular, its 210 components have achieved remarkable results. By the end of October 2023, the cumulative shipment volume of 210R series components developed based on the 210 technology platform had reached 15 GW, while the cumulative shipment volume of the entire 210 product technology platform was over 90 GW. Furthermore, 210R series modules have been widely recognized in the domestic market, and their standard size of 2382mm*1134mm has gradually become a common specification for rectangular silicon wafers. The application of this size helps reduce the cost of PV modules and is receiving attention at global PV industry exhibitions.
3) Energy storage business: A number of benchmark energy storage projects have been successfully implemented overseas, and the energy storage business continues to advance.
In order to promote the development of the energy storage business, Jiangsu Tianhe Energy Storage Co., Ltd., a subsidiary of Tianhe Solar Indirect Holdings, plans to increase its capital and shares by 1.2 billion yuan. Meanwhile, the production capacity of Trina Solar's energy storage battery, DC battery compartment and AC/DC product portfolio in 2023 has reached 12 GWh, and is expected to increase to 25 GWh by the end of the second quarter of 2024. In recent years, several Tianhe energy storage benchmark projects have been successfully implemented overseas. The company uses the overlap between energy storage and photovoltaic users to give full play to its obvious brand, channel, and global advantages in the sales side of photovoltaic products. In the future, the sales scale and market position of the company's energy storage business are expected to be further enhanced.
Profit forecasting and investment advice. Affected by the decline in component prices and depreciation of some assets, we adjusted the company's profit forecast for 2023-2025 to $55.61/86.89/99.01 billion yuan, corresponding PE of 9.7x/6.2x/5.5x, maintaining the “gain” rating.
Risk warning: The world's new PV installations fell short of expectations, and the competitive pattern in the PV module industry worsened.