低电价、低运费、高成品率，降本增效有望加速。公司凭借以下优势，实现快速降本增效：1）低电价：生产基地主要集中在低电价地区，其中四川基地2023 年6 月代理购电价格仅0.34 元/kWh；2）低运费：建厂位置有效辐射多个行业领先的组件厂商，有效锁定下游客户、节约运费；3）高良品率：预计综合良品率可达 90%左右，处于行业先进水平。Incident: Recently, the company announced its 2023 annual report. The company's revenue for 2023 was 6.6 billion yuan, +31.1% year over year; net profit to mother was 390 million yuan, -3.5% year over year; net profit after deducting non-return to mother was 190 million yuan, +88.4% year over year.
Volume increase, price reduction, cost reduction. In 2023, China's solar cell production was +54% year-on-year, and the company's new energy glass sales volume was +59%, reaching 360 million square meters, mainly benefiting from the increase in production capacity. As of 2023, the company was producing 5270 tons/day of original photovoltaic glass, +13% year-on-year. According to our estimates, the average price of the company's new energy glass in 2023 was 17.5 yuan/square meter, -14.0% year on year, unit cost 15.5 yuan/square meter, -14.2% year on year, gross profit margin of 11.7%, and +0.2 pct year on year.
Production capacity expansion continues to advance. The company's Yixing New Energy Project has been started and put into operation. The construction of the Luoyang New Energy and North Glass projects is progressing according to plan. The actual completed investment amounts in 2023 were 590 million yuan and 270 million yuan respectively, and the project progress was 45% and 40% respectively. At the end of 2023, the amount of projects under construction by the company was 1.77 billion yuan, reaching a new high level in recent years, accounting for 36% of fixed assets, and production capacity expansion continued to advance.
With low electricity prices, low freight, and high yield, cost reduction and efficiency are expected to accelerate. The company uses the following advantages to achieve rapid cost reduction and efficiency: 1) low electricity prices: production bases are mainly concentrated in low electricity price regions, with the proxy electricity purchase price of only 0.34 yuan/kWh in the Sichuan base in June 2023; 2) low freight: the factory location effectively radiates multiple industry-leading component manufacturers to effectively target downstream customers and save freight; 3) High yield: The overall yield rate is expected to reach about 90%, which is at the advanced level of the industry.
Or buy thin-film battery companies in due course to open up room for future growth. Cadmium telluride thin film batteries are a new generation of green building materials, in line with BIPV trends. Kaisheng Group has been working in the field of cadmium telluride batteries for many years, and the technology has reached the international advanced level. Currently, this part of the assets is managed by the company. In the future, the company may acquire shares in the thin-film battery target company in due course to expand its business scale.
Maintain an “better than the market” rating. We expect the company's EPS from 2024 to 2026 to be 0.83, 1.03, and 1.23 yuan/share respectively. Considering comparable company valuations, we will give the company 15 to 18 times PE in 2024, with a reasonable value range of 12.45 to 14.94 yuan/share, giving it a “superior to the market” rating.
Risk warning. The progress of PV installation and glass penetration rate improvement fell short of expectations; the company's new production capacity was progressing slowly.
