Core views
2024Q1 achieved revenue of 79.771 billion yuan, -10.4% YoY, -24.9% month-on-month, net profit of 10.510 billion yuan, +7.0% YoY, -19.0% month-on-month, net profit before deducting 9.24 billion yuan, +18.6% YoY and -29.5% month-on-month. In terms of volume, 2024q1 batteries sold about 95 GWh, of which energy storage accounts for nearly 20%, and the global market share of power batteries is steadily increasing. On the positive side, 2024Q1's gross profit margin was 26.4%, +5.1pct year over year, and +0.7pct month-on-month, a record high since 2021/Q4; 2023Q1's unit profit has remained stable for five consecutive quarters. The quality of the company's financial reports is steady, and various indicators such as cash flow and operating capacity remain strong.
occurrences
The company released its 2024 quarterly report:
2024Q1 achieved revenue of 79.771 billion yuan, -10.4% YoY, -24.9% month-on-month, net profit of 10.510 billion yuan, +7.0% YoY, -19.0% month-on-month, net profit before deducting 9.24 billion yuan, +18.6% YoY and -29.5% month-on-month.
reviews
Volume: Shipments have increased steadily, and market share continues to rise
The company's 2024Q1 battery sales volume was about 95 GWh, an increase of about 20% over the previous year, with energy storage accounting for nearly 20%. The global market share of power batteries increased steadily. In January-January 2024, the company's global power battery market share was 38.4%, +5pct; in January-January 2024, the company's domestic power battery market share was 48.4%, +4pct year on year.
Profit: The gross margin hit a new high since 202Q4, and the overall profit per unit remained stable 1) In terms of gross margin, the company's gross profit margin was 26.4%, +5.1 pct year over year and +0.7 pct month-on-month, a new high since 2021 Q4, mainly due to: 1) the price reduction of raw materials was greater than the decline in sales prices, and the company's unit profit was stable; 2) The company received 102.4 billion yuan in cash in the 2024Q1 cash flow statement, and the company's estimated debt increase of 5.6 billion yuan (mainly including sales profit rebates and warranty guarantees) The gross margin for the quarter is expected to be stronger than the report.
2) In terms of unit profit, the company's unit profit has remained stable for five consecutive quarters since 2023Q1. Looking at the packaging materials and battery business, 2023Q1-2024Q1's gross profit per unit was 0.238/0.243/0.234/0.222 yuan/Wh; the net profit per unit was 0.098/ 0.108/0.093/0.110/0.097 yuan/Wh. The slight month-on-month decline in Q1 was mainly due to a slight month-on-month decline: 1) Q1 was a low annual sales season, and capacity utilization was relatively low; 2) Q1's financial expenses are expected to be affected by exchange losses of 1.9 billion yuan, which disrupted profits.
The quality of financial reports is steady, and cash flow remains strong:
1) In terms of cash flow, 2024Q1 had a net operating cash inflow of 28.4 billion yuan, of which net cash inflow from sales products increased by 2.04 billion yuan and expenditure on purchasing goods decreased by 5.49 billion yuan; revenue ratio was 128%, net present ratio was 253%, and month-on-month +24/54 pct, a record high.
2) In terms of operating capacity, 2024Q1's accounts receivable turnover days were 65 days, while accounts payable turnover was 176 days, a record high. The net business cycle was 42 days, reflecting the company's strong upstream and downstream control capabilities.
3) In terms of inventory management, inventory has continued to be removed since 2023. The 2024Q1 company's inventory was 43.98 billion yuan, and since 2023, the inventory was 32.7 billion yuan. The number of days in the 2024Q1 inventory was 68.9 days, down 21.9 days from year on year, and continued to decline 2.4 days from month to month.
4) In terms of financial expenses, 2024Q1 has financial expenses of 310 million yuan. There is a difference of about 1.9 billion yuan between quarterly interest income of 2.63 billion yuan and interest expenses of 1.05 billion yuan. We expect this is mainly due to exchange losses.
5) In terms of other revenue, 2024Q1 has other revenue of 3.21 billion yuan. In addition to government subsidies of 1.82 billion yuan, most of the other benefits are about 1.39 billion yuan from preferential tax policies for advanced manufacturing. According to the policy, this revenue can continue until 2027.
6) In terms of non-operating profit and loss, considering the value-added tax input deduction of about 1.39 billion yuan in other income in 2023Q4, and exchange losses of about 1.9 billion yuan in financial expenses, the impact on operating profit for the quarter was small after offsetting each other.
Profit forecast: The company's power energy storage battery shipments are expected to exceed 470 GWh in 2024. The company's net profit is expected to be 513.65/587.83/69.924 billion yuan in 2024-2026. The PE corresponding to the current stock price is 16.79/14.67/12.33. The valuation is at the bottom of history, giving it a “buy” rating.