Description of the event
On March 26, the company disclosed its 2023 annual report, achieving full year revenue of 21.52 billion yuan, +39.2% year over year; net profit to mother of 2.76 billion yuan, +30.0% year over year. The Q4 2023 quarter achieved revenue of 5.64 billion yuan, +32.8% year-on-year; net profit to mother was 790 million yuan, +27.8% year-on-year.
Incident reviews
Profitability was steady, and strong production and sales of photovoltaic glass led to revenue growth. The company's revenue was mainly contributed by photovoltaic glass products, which accounted for 91.4% of the revenue in 2023. The production volume/sales volume of photovoltaic glass in 2023 was 12.1/1.22 billion square meters respectively, +44.5%/49.5% year-on-year, respectively. The high increase in production and sales led to the company's overall revenue growth. The company's gross margin for the full year of 2023 was 21.8%, down 0.3 pct year on year; net profit margin to mother was 12.8%, down 0.9 pct year on year, which was basically stable.
Adhere to the global strategy and steadily advance production expansion at home and abroad. By the end of 2023, the company's total production capacity was 20600 t/d; the company's Anhui Phase IV project and the Nantong project are expected to be ignited and operated during the year, with a total daily melting volume of 9600 t/d, and a total daily melting volume of 30,200 t/d by the end of 2024. Overseas, the company already has a production line in Vietnam and plans to invest in a 2*1600t/d production line in Indonesia. The net profit margin of the company's subsidiary Vietnam Follett in 2023 was 22.1%, which is significantly higher than at home. Continued expansion of overseas production capacity is conducive to better meeting the product needs of different countries and regions, and enhancing the company's resilience to risk and profitability.
Expense rates declined steadily during the period, and cash flow improved markedly in Q4. In 2023, the company's sales/management/R&D/finance expenses ratio was 0.56%/1.40%/2.77%/2.24%, respectively; the total cost ratio was 6.97%, down 0.54 pct year on year. Q4 The company's net operating cash flow was 1.99 billion yuan, a significant improvement over the same period last year, mainly because the company did not increase production capacity in the second half of 2023.
Investment advice
The company is a leading enterprise in the photovoltaic glass industry. In the future, it will continue to maintain its leading position in the industry with scale advantages, resource advantages and technical advantages. The decline in the price of natural gas and soda ash will drive down the production cost of photovoltaic glass, and the company's performance is expected to improve quarterly in 2024. We expect the company's 2024-2026 EPS to be 1.59\ 1.98\ 2.49, respectively, corresponding to the company's closing price on March 29, and the 2024-2026 PE will be 17.9\ 14.4\ 11.4, respectively, maintaining a “buy-A” rating.
Risk warning
Increased competition in the industry, demand for photovoltaics falling short of expectations, the impact of fluctuations in raw materials and fuel prices, and the risk of production capacity construction falling short of expectations, etc.