Event: The company released its 2024 quarterly report. 24Q1 achieved operating income of 79.77 billion yuan, -10%/-25% YoY, realized net profit of 10.51 billion yuan, +7%/-19% YoY, realized net profit of 9.25 billion yuan, +19%/-29% YoY. 24Q1's gross sales margin reached 26.42%, +5.15/0.76pct, net sales margin of 14.03%, YoY +2.71/+0.62 pct.
Net operating cash flow reached RMB 28.36 billion in 24Q1, and monetary capital reached RMB 288.6 billion at the end of the period. The company's performance exceeded market expectations, and the cash flow performance was strong.
24Q1 power storage shipments maintained a high year-on-year increase, and unit profit remained at a high level. 24Q1's power storage shipments were about 95 GWh, +24.5% year over year, of which power was about 77 GWh, +23.4% year on year, and 18 GWh of energy storage, +29.1% year on year. According to SNE data, in January-January '24, the company's global power battery share was 38.4%, +5pct year on year. According to power battery alliance data, the company's 24Q1 domestic power battery share reached 48.9%, +4pct year on year, and the company's dominant position as a leading global power battery company continued to strengthen. On the profit side, we estimate the gross margin per unit for 24Q1 of 26%, gross profit per unit of 0.20 yuan/Wh, net profit per unit of about 0.09 yuan/Wh, gross margin of energy storage of 27%, gross profit per unit of 0.21 yuan/Wh, and net profit per unit of 0.10 yuan/Wh. We expect the company to ship more than 390 GWH of power batteries in '24, +22% compared to the same period, and more than 90 GWh of energy storage batteries, +31% over the same period. Power storage shipments will maintain a high growth rate, and net profit per unit will maintain a high level.
Dynamic Shenxing batteries were delivered to customers on a large scale, and the energy storage system “Tianheng” was released with zero attenuation for 5 years. The company's Shenxing Battery 24Q1 was delivered to customers on a large scale. Among them, the all-rounder series product first landed on the Xiaomi SU7 PRO, achieving the highest level of battery life of 830 km with lithium iron phosphate for the first time in the industry. The “Rock” high-safety skateboard chassis is used in Avita models to improve vehicle safety. In the field of energy storage, the company released the world's first 5-year zero attenuation 6.25 MWh energy storage system. The continuous development and application of high-quality products continues to consolidate the company's leading position.
Investment advice: The company's products have obvious technical advantages and a stable leading position. We expect the company to achieve net profit of 498.80/583.61/67.228 billion yuan in 2024-2026, +13.1%/+17.0%/+15.2% year-on-year, corresponding EPS of 11.34/13.27/15.28 yuan, maintaining a “buy” rating.
Risk warning: downstream demand falls short of expectations; overseas business progress falls short of expectations; industry competition intensifies.