On March 27, 2024, the company disclosed its annual report. In 2023, it achieved revenue of 21.524 billion yuan, +39.21% year over year; net profit to mother was 2,760 billion yuan, +30.00% year over year. Among them, Q4 achieved revenue of 5.639 billion yuan, +32.80% year-on-month, and -9.14% month-on-month; net profit to mother was 791 million yuan, +27.91% year-on-year, and -10.48% month-on-month.
The gross margin is leading the industry, and the production and sales ratio has further increased. The company achieved revenue of 19.677 billion yuan in 2023, a year-on-year increase of 43.82%, gross profit margin of 22.45%, and a year-on-year decrease of 0.86pct. From an industry perspective, the price of photovoltaic glass was squeezed by downstream components in 2023. Although raw materials and energy prices declined in the second half of the year, the overall price decline still suppressed gross profit margins. However, according to Zhuochuang data, the gross margin of the photovoltaic glass industry was -0.29% in 2023. Follett's gross margin was far ahead of the industry, showing strong alpha attributes. In terms of production, the company shipped about 1.22 billion square meters of photovoltaic glass in 2023, an increase of 49.5%. At the same time, production and sales volume reached 101%, up 4 pcts year-on-year from 2022, achieving full production and sales.
Production capacity is expected to be launched at an accelerated pace in 2024, and the overseas production capacity layout is expected to increase profitability. By the end of 2023, the company's production capacity reached 20,600 tons/day. The total melting volume of the Anhui Phase IV project and the Nantong project is 9,600 tons/day. It is expected that after 24 years of ignition, the company's total production capacity will reach 30,200 tons/day, further consolidating its production capacity and scale advantages. The company is already in Vietnam and plans to build a photovoltaic glass production line in Indonesia. Among them, the kiln invested in Indonesia is the first in the industry to use 1,600 tons/day high-capacity kilns, and its energy consumption level will be lower than the current conventional 1000 tons/day and 1200 tons/day kilns in the industry. The company's overseas sales channels are also steadily expanding. According to the company's annual report, in 2023, the company's PV glass gross margin in other Asian countries and regions reached 27%, Europe's gross margin reached 43%, and North America's gross margin reached 27%, all higher than the company's average gross profit margin of 23%. Profitability is expected to be further enhanced as the company continues to deepen its overseas business layout.
Investment advice: The company is expected to achieve net profit of 38.14/49.12/5.925 billion yuan in 24-26, +38.2%/+28.8%/+20.6% year-on-year, and EPS of 1.62/2.09/2.52 yuan respectively, maintaining an “increase” rating.
Risk warning: downstream demand falls short of expectations, and raw material prices have risen more than expected