The company's performance in 2023 is under pressure: According to the company's 2023 performance report, the company achieved revenue of 2,235 billion yuan in 2023, -2.86% year over year, net profit to mother - 33.2715 million yuan, -130.19% year over year, net profit after non-return to mother - 99.517 million yuan, year-on-year ratio -108.09%. The main reason for the loss is: the large cylindrical cell business is in the early stages of production, and the production and yield rate are still climbing. The unit manufacturing cost is high, and the battery cell market price continues to drop. goods Losses due to price drops have increased. Furthermore, due to changes in the environment, the slowdown in demand from end customers, and the removal of inventory by downstream enterprises, the company's product structure and customer structure have changed greatly, and the overall gross margin has declined.
Leading domestic lightweight power lithium battery, continuously expanding overseas markets. The company's lithium-ion batteries for light vehicles are mainly used in electric two-wheelers, including electric mopeds and electric motorcycles. The company's electric moped batteries are mainly aimed at the European and American markets. The main customers of electric motorcycles are domestic and foreign manufacturers for overseas markets, including Qiulong Technology, Wuyang Honda, Maverick Electric, etc. The company entered the development and application of electric motorcycle batteries earlier, and is currently in the first tier of suppliers in the customized electric motorcycle battery segment. 2023H1's light vehicle lithium-ion battery business achieved revenue of 472 million yuan, or -34.85%. It is mainly affected by factors such as overseas inflation, geopolitics, and product inventory removal. With the rise of overseas electric motorcycle markets such as Southeast Asia and India, the company will actively explore overseas markets for electric motorcycle batteries.
The energy storage business is growing rapidly, and its driving force is increasing. The company's energy storage batteries mainly include portable energy storage and household energy storage. The main end customers for portable energy storage are in overseas markets such as the US, and the main household energy storage customers are concentrated in the South African market. The company uses the ODM model to provide products and services for domestic and foreign energy storage manufacturers. 2023H1's energy storage business grew rapidly, achieving revenue of 440 million yuan, +253.72% over the same period. The small and medium-sized industrial and commercial energy storage developed by the company was shipped in small batches. On the customer side, the company's energy storage batteries have been recognized by domestic and foreign manufacturers, and are cooperating closely with manufacturers such as Goal Zero and DURACELL.
Large cylindrical batteries have been mass-produced and shipped to help improve the company's profitability. The 34 series large cylindrical batteries developed by the company have the characteristics of high safety, low internal resistance, long life, low temperature use, etc., and are suitable for electric two-wheelers and energy storage products. They have passed multiple customer tests and certification, and mass production and shipment will be achieved in the first half of 2023. It is expected that as production capacity climbs and yield increases, the company's cell self-supply rate will further increase and profitability will improve.
Profit forecasting and valuation. We expect the company's net profit to be -033 million yuan, 113 million yuan, and 219 million yuan respectively in 2023-2025. The company is a leading domestic lightweight power lithium battery, and the energy storage business is developing rapidly. We expect that with the gradual completion of the company's inventory removal, domestic and foreign demand for light power tools and energy storage, and the company's large cylindrical cell production capacity will rise, and the company's profitability and performance will be repaired. Considering comparable company valuation levels, the company will be given a PE valuation of 23-25 times in 2024, corresponding to a reasonable value range of 26.01 to 28.27 yuan. The first coverage was given a “superior to the market” rating.
Risk warning. Downstream demand falls short of expectations; the company's production capacity investment falls short of expectations; risk of price fluctuations of major raw materials; risk of exchange rate fluctuations.