Description of the event
The company released the 2023 annual results report, achieving annual revenue of 6.43 billion yuan, an increase of 74% year on year; net profit to mother of 350 million, up 696% year on year; deducted non-net profit of 320 million yuan, an increase of 2321% year on year.
Incident comments
The company's performance is outstanding, demonstrating the strength that leading companies should have. Since 2021, due to rising component prices, demand for terrestrial power plants is under pressure, competition for stents is fierce, and the tracking penetration rate has increased slowly, and the company's performance has been under pressure many times. The company's excellent performance in 2023 indicates that after component prices fell and ground-based power plants were launched, the company has taken a big step out of trouble on the reporting side, and the trend of accelerated growth after the inflection point is obvious.
Looking at the breakdown, the company's Q4 revenue scale exceeds 3 billion, accounting for nearly 50% of the whole year, which is higher than the previous year's level of around 40%. The company's products and market structure continue to be optimized. Q4 Non-European and American overseas markets such as India, the Middle East, and Latin America are expected to account for a high share, and most of them are tracking brackets. Benefiting from this, the company's Q4 gross margin is expected to increase month-on-month. At the same time, we expect Q4's capacity utilization rate to exceed 100%, all expenses will be significantly diluted, and the cost ratio is expected to drop significantly.
Looking ahead to the future, the company's quantitative profit trend is clearly improving, and it is worth looking forward to. In terms of volume, the company's orders of 4.7 billion at the end of Q4 (tracking 3.6 billion plus fixed 1 billion + other 100 million dollars) will support continued high sales growth next year, and the structure is expected to lean further towards high-profit tracking brackets. In this context, we expect the company's revenue to grow by more than 20%-30% in 2024. On the market side, the company fully enjoyed the accelerated growth of non-European and American overseas markets, strengthened its local layout in Latin America, and consolidated its advantages in the Middle East and India. Fortunately, the logic of increasing demand for terrestrial power plants and tracking penetration continues to be implemented. We expect that the gross margin of subsequent companies' tracking and new fixed bracket orders will remain at a good level, and there is no shortage of room for further improvement.
We expect the company to achieve net profit of 50 million dollars in 2024, corresponding to PE 24 times. Maintain a buy rating.
Risk warning
1. Deterioration of the competitive landscape;
2. PV installation falls short of expectations.