Event: The company publishes its 2023 annual report. For the full year of 2023, the company achieved revenue of 21,524 billion yuan, +39.21% year on year; net profit to mother of 2,760 billion yuan, +30.00% year over year; deducted non-net profit of 2,694 billion yuan, +29.87% year over year. Among them, 2023Q4 achieved revenue of 5.639 billion yuan and net profit of 791 million yuan to mother. According to financial data, the company's net cash flow rebounded significantly, and production capacity+cost advantages gradually stabilized its leading position.
The advantage of production capacity and shipment is obvious, and the layout is overseas to enter the new track. By the end of 2023, the company's total production capacity of photovoltaic glass was 20,600 tons/day, with a total daily melting volume of 9,600 tons/day for the Anhui Phase IV project and the Nantong project, which is expected to be ignited and operated this year. In the current situation where the release of photovoltaic glass production capacity is limited, the company continues to expand countercyclically, its market share will further increase, and its production capacity advantage will be further expanded. At the same time, the company lays out overseas markets and plans to invest in the construction of photovoltaic glass kilns in Indonesia to meet the demand for photovoltaic glass in different countries and regions.
Lay out quartz sand raw materials upward to deepen cost advantages. The company actively lays out upstream quartz sand resources to reduce the impact of fluctuations in raw material prices and higher external procurement prices on costs, and further deepens the cost advantage. According to the annual report, the company currently operates mines and sells quartz ore at four wholly-owned subsidiaries in Anhui and Australia. Based on this, the company, as a leader in the photovoltaic glass industry, is expected to cross the cycle at the bottom of the industry.
The company's financial performance is excellent, and glass beta is expected to bottom up. According to the annual report data, the company's current monetary capital increased significantly in 2023, reaching 6.616 billion yuan, +126% year over year; the balance ratio continued to decline, -8.53 percentage points year on year, and the improvement in the balance and liability situation is expected to support the company's subsequent expansion of production capacity and technology research and development. Looking ahead, the photovoltaic glass sector has been at the bottom for quite some time. The supply and demand for production capacity has gradually improved. As cold repair production capacity continues to rise and the demand side continues to improve, there is potential for the price of photovoltaic glass to rise.
Profit forecast: PV glass prices are expected to resume the upward trend. We expect the company to achieve net profit of 37.35/49.86/5.818 billion yuan in 2024-2026, corresponding to PE valuation 18.3/13.7/11.8 times, and maintain an “increase” rating.
Risk warning: PV demand falls short of expectations, industry competition intensifies, and PV glass price trends are lower than expected.