Incident: The company released its 2023 annual report. In 2023, the company achieved operating income of 6.184 billion yuan, an increase of 73.19% over the previous year; realized net profit of 1,461 billion yuan, an increase of 85.28% over the previous year.
Performance grew rapidly, and cost reduction and efficiency maintained good profitability. In 2023, the company's equipment orders increased dramatically; diamond wire production capacity and shipments increased dramatically; production capacity in the silicon wafer cutting and processing service business continued to be released, the advantages of specialized cutting technology continued to lead, and the scale of shipments increased dramatically; cutting equipment and cutting consumables products continued to lead in innovative business, and orders grew steadily. The company helps customers reduce costs and increase efficiency through continuous optimization and iteration of products, and promotes a continuous increase in the market share of the company's products; at the same time, it has continuously achieved cost reduction and efficiency through technological progress, maintained profit resilience during the downward price cycle of the industrial chain, and achieved rapid growth in performance.
Slicer competitiveness continues to lead. In the field of photovoltaic cutting equipment, the company's fifth-generation diamond wire crystal silicon slicer GC700X continues to be modularized and upgraded to maintain a competitive advantage in the leading market. In 2023, the company accelerated the iteration of slicers and launched new GC-700XL slicers, GC-800XP slicers and GC800X slicers to diversify products and meet the different needs of customers. Product competitiveness continues to lead, and the market share is stable. In the field of silicon carbide, the silicon carbide diamond wire slicer launched by the company has formed batch orders, covering the vast majority of the industry's new diamond wire slicing capacity. Among them, the 8-inch silicon carbide diamond wire slicer has been verified, approved, and orders have been formed by leading customers in the industry.
The 2024 Annuity Line production capacity is expected to reach more than 100 million km/year. The company has achieved mass sales of 36 μm, 34 μm and 32 μm linear high carbon steel wire diamond wire, and batch testing of 30 μm linear high carbon steel wire diamond wire. In 2023, the company's annual production of King Kong wire was about 56 million kilometers, an increase of 65.57% year on year. Annual sales volume (excluding personal use) was about 38 million kilometers, an increase of 51.08% year on year, and the market share increased steadily. At the end of 2023, the company's diamond wire production capacity reached 60 million kilometers. After the production capacity in Huguan (Phase I) is fully released, the company's diamond wire production capacity can reach more than 100 million kilometers, which will play a positive role in further increasing its market share in the future.
The scale benefits of silicon wafer cutting and processing services have been shown. By the end of 2023, the production capacity of the company's silicon wafer cutting and processing services had reached 38 GW, with effective shipments of about 25.5 GW throughout the year. The “Yibin (Phase I) 25GW PV Large Silicon Wafer Project” has entered the preparation stage and is expected to reach production in the first half of 2024. The production capacity of the company's silicon wafer cutting and processing services is expected to reach 63 GW by the end of 2024.
Profit forecast: Considering that demand in the PV industry may fluctuate in 2024, the company's net profit for 2024-2026 is estimated to be 12.57 billion yuan, 15.76 billion yuan, and 1,904 billion yuan, respectively, maintaining the “increase in holdings” rating.
Risk warning: Silicon wafer production expansion falls short of expectations, risk of profit fluctuations in the company's foundry business, and increased market competition.