Introduction to this report:

The company released the 2023 performance report and 24Q1 performance forecast. 24Q1 operations improved significantly, and the performance growth rate is expected to exceed expectations.

Key points of investment:

Adjust the profit forecast for 23 years and maintain the target price. According to the company's 23-year performance report, we adjusted our 23-year performance forecast and maintained the 24-25 forecast: the company's 23-25 EPS is expected to be 0.44/0.32/0.38 yuan (originally 0.43/0.32/0.38 yuan), respectively, +117%/-29%/19% (before +43%/+19%) compared to the same period last year. Maintain the target price of 6.2 yuan.

The 23-year results are in line with the forecast median level, and the 24Q1 results are expected to exceed expectations. The company achieved revenue of 4.116 billion yuan in 2023, +7.8% year on year, 655 million yuan, and +117.1% year over year; of these, 23Q4 achieved revenue of 889 million yuan, -23.7% year on year, and 70 million yuan, and +6.8% year over year. The company expects to achieve a return of 0.75 to 96 million yuan in 24Q1, +11% to 42% year-on-year.

The 23Q4 revenue side was under pressure, and the impact of the single quarter was significant. The decline on the revenue side in 23Q4 is mainly due to declining demand in the new energy equipment and optical communication materials business. On the performance side, due to the implementation of employee shareholding plans, the equity incentive salary of about 9.55 million yuan is expected to be concentrated in 23Q4, putting some pressure on net profit from the table end to mother in a single quarter, thus falling short of expectations.

24Q1 operations improved markedly from month to month, and the new business is expected to be steady, moderate and positive, and needs to be scaled up urgently. Downstream demand in the 24Q1 new energy equipment business is better than the company's expectations in early '24. Order delivery performance is expected to be good, and the gross margin of the sector is driving overall profit optimization; traditional home space production is still hot, and the traditional air conditioning PTC business is benefiting; PTC for new energy vehicles is expected to continue in a period of rapid growth, and many fixed-point models will usher in volume in 2024; the market promotion of 23Q4-24Q1 pre-nickel-plated battery materials is relatively smooth, and customer verification is progressing steadily.

Risk warning: Auto companies' customer expansion falls short of expectations; polycrystalline silicon production capacity reduces PV companies' investment in downstream equipment