Incident: The company released its 2023 annual report. In 2023, it achieved operating income of 8.733 billion yuan, a year-on-year increase of 45.43%, and achieved net profit of 1,634 billion yuan, an increase of 56.04%; 2023Q4 achieved operating income of 2,328 billion yuan, an increase of 33.15% over the previous year, and realized net profit of 411 million yuan, a year-on-year increase of 81.77% and a decrease of 12.74% month-on-month. It is proposed to distribute a cash dividend of $12 (tax included) for every 10 shares.
The large-scale expansion of TopCon battery technology helped the company's equipment sales scale grow rapidly.
Technological changes in the industry accelerated in 2023, and TopCon battery technology became mainstream in the market. With leading technology and products, the company achieved a rapid increase in sales of related equipment. In 2023, the company's solar cell production equipment shipments increased 221.27% year on year to 34093 tube/unit, and sales increased 18.96% year on year to 9906 tube/unit; in 2023, the company's process equipment revenue increased 42.27% year on year to 7.062 billion yuan, and gross margin increased 3.42 pcts year on year to 27.78% year on year; The operating revenue of automation supporting equipment increased 96.20% year-on-year to 1,137 billion yuan, and gross margin increased 9.24 pcts year-on-year to 22.44%.
The scale of on-hand orders has grown rapidly, and breakthroughs have continued to be made in photovoltaic cells and semiconductor equipment research and development.
As downstream customers expanded production and the volume of orders in hand grew rapidly, as of the end of 2023, the company's contract debt reached 18.111 billion yuan, up 211.6% year on year, 2023H2 added 6.278 billion yuan in contract debt (2023H1 added 6.021 billion yuan); by the end of 2023, the company's inventory reached 21.282 billion yuan, up 201.1% year on year, and 2023H2 added 8.858 billion yuan (2023H1 added inventory of 5.357 billion yuan).
The company continued to increase its R&D efforts. In 2023, R&D investment increased 63.29% year-on-year to 467 million yuan, accounting for 0.59 pcts of revenue to 5.35%. With the support of continuous R&D investment, the company has made breakthroughs and progress in various fields: on the TopCon route, the company has developed an industry-advanced velvet Plus series equipment product based on the PE-poly technology route to further improve battery conversion efficiency; on the HJT route, the company's plate PECVD RF microcrystal P has made a breakthrough in the high rate high crystallization rate deposition process, and high-capacity RF plate PECVD is expected to reduce 1-2 microcrystalline P cavities compared to mainstream equipment on the market; on the perovskite and perovskite laminated route Above, the company's 5-in-1 cluster perovskite laminated vacuum coating equipment was successfully launched, which can significantly reduce the equipment footprint, reduce capital expenditure and test costs, and effectively improve the efficiency of perovskite batteries. In the semiconductor field, the company's R&D team successfully developed silicon carbide high-temperature heat treatment equipment and successfully shipped it to a leading domestic semiconductor IDM company after pre-inspection.
Maintaining a “buy” rating: For high-efficiency battery technology, the company is an industry-leading supplier of equipment with full-line solutions for multiple technology routes. Considering that the TopCon production line commissioning speed was slightly lower than expected, we slightly lowered our profit forecast. The company's net profit forecast for 2024-26 is 26.29/34.40/3,967 billion yuan (5% down/maintenance/increase). The current stock price corresponds to 2024 PE 8 times, maintaining a “buy” rating.
Risk warning: The company's production expansion progress falls short of expectations; the promotion and application of new equipment falls short of expectations; the inventory scale is large, and there is a risk that liquidity will be under pressure.