Incidents:
The company recently issued an announcement on the development of an action plan to double improve quality and return and the progress of the repurchase of the company's shares. In order to improve the company's investability and give investors a sense of gain, the company formulates action plans to improve both quality and return. As of January 31, '24, the company repurchased 2.406 million shares of the company through centralized bidding transactions through a special securities account for share repurchase, accounting for 0.48% of the company's current total share capital.
Market share is expected to increase steadily, and product price cuts will affect net profit
In '23, the company's large reserves collected large orders such as CNPC and China Electric as the main increase. The company has a forward-looking layout for industrial and commercial energy storage. The GREAT series of industrial and commercial energy storage was released in August '23, with high product safety, high system energy efficiency, and long life; the 60 MWh bus new energy smart system project released in December '23 is currently the largest distributed industrial and commercial energy storage project in China, and the company's industrial and commercial energy storage market share is expected to increase further.
Focusing on technological innovation, the prospects for energy storage+sodium electricity are promising
The company adheres to technological innovation. In April 23, it launched an electric energy storage cell with a capacity of 320 Ah, which can reach 10,000 cycles and has high energy conversion efficiency; the commercial user side 10MW energy storage project using liquid cooling system technology was connected to the grid in June 23, which was the first large-scale use of liquid cooling systems in the domestic industrial and commercial energy storage field; in July 23, the company launched the world's first S24 electrode optimization technology, which increased cell life by more than 20%; in addition, the company's layered oxide system and polyanionic sodium batteries achieved cycle life of more than 3,000 weeks and 6,000 weeks respectively. The sodium-ion battery has passed the evaluation unit, and the future is promising.
Overseas layout accelerates, creating a second growth curve for performance
In '23, the company accelerated its overseas market layout and set up offices in Europe, North America and Japan. Relevant samples have been sent to European and American customers, and the products have now been sold on a large scale in the South African market. In August 23, the company signed a cooperation agreement with Discover to jointly explore the North American market. The agreement included a 5.1 GWh battery product procurement plan; in November 23, the company signed a cooperation agreement with Genaspi Energy to provide it with 1 GWh energy storage batteries. It is expected that the accelerated layout of overseas business will contribute to the company's new growth in performance.
Profit Forecasts, Valuations, and Ratings
The drop in the price of raw materials was compounded by the removal of inventory. Furthermore, the price reduction of the company's products also caused preparations for large inventory price drops, which affected profits. We expect the company's revenue for 2023-25 to be 70.25/76.49/8.494 billion yuan, respectively, with corresponding growth rates of -22.52%/8.89%/11.04%; net profit to mother of 0.77/5.45/659 million yuan, respectively, corresponding growth rates of -87.81%/611.62%/20.97%, EPS 0.15/1.08/1.31 yuan/share, respectively. The corresponding PE is 142/20/17 times, respectively. It is recommended to keep an eye on it.
Risk warning: downstream demand falls short of expectations; industry competition intensifies; raw material prices fluctuate greatly