The company's revenue grew rapidly, and net profit turned a loss into a profit. In 2023, the company achieved operating income of 9.603 billion yuan, an increase of 154.94%; net profit attributable to shareholders of listed companies was 386 million yuan, an increase of 2336.51% year on year, turning a loss into a profit. Among them, in Q4, the company achieved operating income of 3,506 billion yuan, an increase of 33.74% over the previous month; net profit to mother was 93 million yuan, an increase of 3.37% over the previous month. The increase in performance in 23 years was mainly due to strong demand in the global photovoltaic market and rapid industrialization of N-type batteries, which led to an increase in silver paste sales; in addition, foreign currency loan exchange losses were reduced due to the appreciation of the US dollar. In 2023, the company's gross margin was 11.14%, an increase of 2.34pct over the previous year, mainly because compared with PERC silver paste, the higher technical difficulty of N-type silver paste led to an increase in the processing cost per unit of silver paste, and the increase in the share of N-type silver paste led to an increase in gross margin.
Benefiting from the volume of N-type TopCon from downstream customers, the share of N-type silver paste sales rose rapidly.
Throughout 2023, the company achieved sales of 1713.62 tons of photovoltaic conductive silver paste, an increase of 137.89% over the previous year; of these, the full range of conductive silver paste products used in N-type TopCon batteries achieved sales of 1008.48 tons, accounting for a rapid increase of 58.85% of the company's total sales volume of photovoltaic conductive silver paste products, which is in a leading position in the industry. With the rapid release of N-type batteries in the photovoltaic industry, especially TopCon batteries, the company expects PV silver paste shipments to reach 2500-3000 tons in 2024, and the share of TopCon silver paste shipments will further increase, which is expected to achieve a sharp increase in volume profit.
The company has achieved multiple rounds of product iterative upgrades in the photovoltaic and semiconductor fields. In the field of photovoltaics, the company has leading performance in low-temperature silver paste and silver-coated copper paste products used in N-type HJT batteries and has achieved large-scale mass production and shipment; the company continues to supply and deliver conductive silver paste products used in new IBC batteries, and the product performance is in a leading position in the industry. In the field of semiconductor electronics, for power semiconductor packaging applications, sintered silver and AMB ceramic copper-clad plate brazing pastes for chip bonding have entered the marketing stage, and the company is expected to form a new profit growth point.
Valuation forecast and investment suggestions: With the rapid release of the company's TopCon products and the acceleration of the localization process of silver powder, the company's profit level is expected to maintain high growth. We expect the company's 2024-2026 revenue to be 139.75/157.64/17.977 billion yuan, and net profit to mother will be 6.21/7.79/902 million yuan; diluted EPS will be 4.43/5.56/6.43 yuan/share respectively, maintaining 16 times the company's PE in 2024. The corresponding target price is 70.84 yuan, maintaining the “superior market” evaluation grade.
Risks: Demand for silver paste falls short of expectations; technological development falls short of expectations; risk of fluctuations in raw material prices, etc.