Core views
The company achieved operating income of 4.233 billion yuan in the first quarter of 2024, a year-on-year decrease of 8.6%, a year-on-month increase of 6.8%, and realized net profit of 353 million yuan, a year-on-year decrease of 39.4% and a year-on-month increase of 112.7%. Q1 Competition in the photovoltaic industry intensified, and the price of photovoltaic products declined year-on-year, but the resilience of the company's performance was outstanding. The company maintains profitability above the industry average through the expansion of black components, non-standard components, and differentiated distribution markets. We anticipate that with differentiated competitive advantages, the company is expected to maintain industry-leading profitability.
occurrences
Company Announces 2024 Quarterly Report
In the first quarter of 2024, the company achieved operating income of 4.233 billion yuan, a year-on-year decrease of 8.6%, a year-on-month increase of 6.8%, and realized net profit of 353 million yuan, a year-on-year decrease of 39.4% and an increase of 112.7% month-on-month. Net profit without return to mother was 335 million yuan, a year-on-year decrease of 40.5% and a year-on-month decrease of 14.3%.
Brief review
Q1 Competition in the photovoltaic industry intensifies, and the resilience of the company's performance is highlighted
The company achieved operating income of 4.233 billion yuan in the first quarter of 2024, a year-on-year decrease of 8.6%, and realized net profit of 353 million yuan to mother, a year-on-year decrease of 39.4%. Q1 Competition in the photovoltaic industry intensified, and the price of photovoltaic products fell year-on-year. Thanks to the company's differentiated competitive strategy, the company was still able to achieve net profit of 335 million yuan without return to mother.
Q1 PV shipments are expected to increase by more than 20% month-on-month. According to the company's announcement, the company expects 24Q1 PV product shipments to increase by more than 20% month-on-month, with N-type shipments accounting for about 80%. Since the company's distributed shipments account for a relatively high proportion, the average sales price is slightly higher than the industry average. The company's annual photovoltaic product shipment target for 2024 will exceed 15GW.
Focus on differentiated competitive strategies, leading the industry in profitability
The company maintains profitability above the industry average through the expansion of black components, non-standard components, and differentiated distribution markets. Based in Hengdian, with a global layout, the company's overseas revenue accounts for about 60% in 2023. We anticipate that with differentiated competitive advantages, the company is expected to maintain industry-leading profitability.
TopCon production capacity is progressing in an orderly manner, and product performance is excellent
By the end of 2023, the company had 14GW battery production capacity and 12GW module production capacity. The company's Yibin Phase II battery project is expected to be initially completed and gradually put into operation in August, the Lianyungang Phase II module project is expected to be initially completed and gradually put into operation in October, and the overseas 2GW battery project is expected to be completed and gradually put into operation by the middle of this year. In terms of product performance, the company's TopCon module power can achieve full coverage of 420W-700W.
Profit forecast: The company has channel advantages and product differentiation advantages, leading the industry in profitability. We expect the company's 2024-2026 net profit of 19.2, 22.1, and 2.55 billion yuan, corresponding to the PE valuation on April 18, 2024 to be 12.4, 10.8, and 9.4 times, maintaining a “buy” rating.
Risk analysis
1. The risk that industry demand falls short of expectations. The company has strong channel capabilities in Europe, and the European region accounts for a high revenue share. If demand in Europe falls short of expectations, it will have a big impact on the company's component shipments and profitability.
2. The risk that the component business share will be overwhelmed by leading companies. Currently, leading companies in the component sector are highly competitive and have leading brands, channels, and technical capabilities.
Increased competition in the industry can affect a company's profitability.
3. The risk that the development of photovoltaic cell technology falls short of expectations. The photovoltaic industry chain is in an iterative period of battery technology. TopCon technology is still in a stage of rapid progress, and leading companies have advantages in terms of R&D personnel and capital. If battery technology lags behind first-tier companies, then the company's profitability and product competitiveness will be adversely affected.