High-power energy storage PCS leader, 24Q1 profit increased year-on-year

The company achieved net profit of 286 million yuan for the full year of '23, an increase of 250.48% over the previous year; in 24Q1, net profit to mother was 51 million yuan, an increase of 39.91%. Taking into account the company's accelerated expansion into overseas markets, we lowered the 24-25 net profit forecast value to 5.61/7.89 billion yuan (previous value 595/8.75) billion yuan, and added the 26-year forecast value to 1.03 billion yuan. Comparatively, the company's 24-year Wind unanimously expected an average PE of 13 times. Considering the company's significant cost advantage, the energy storage business is expected to expand rapidly and the product spectrum will expand at an accelerated pace, giving the company a 24-year target PE 25 times, with a target price of 39.25 yuan (previous value 34.86), maintaining a “buy” rating.

Revenue and profit increased year-on-year, and the effect of scale was gradually reflected

The company achieved revenue of 4.933 billion yuan, +110.93% year over year; achieved net profit of 286 million yuan, +250.48% year over year; 24Q1 revenue of 711 million yuan, +14.71% year over year; realized net profit of 51 million yuan, +39.91% year over year. The gross margin for 23 years was 19.23%/5.78%, a year-on-year change of +1.95/+2.30pct; the 24Q1 gross and net margin was 23.55%/7.11%, +4.41/+1.22pct year-on-year, a significant increase over the previous period. The company's 23-year sales/management/finance/R&D expenses rate was 4.77%/1.83%/0.12%/5.44%, respectively, with a year-on-year change of +0.05/-0.36/-0.68/ -0.73pct, and the total rate decreased by 1.71 pct year-on-year. The increase in the sales expense ratio is mainly due to the increase in market development expenses.

Energy storage business: Domestic high-power PCS shipments ranked first, benefiting from high-power energy storage bidirectional converters and system integration products achieved operating revenue of 1,927 billion yuan in 23 years, +88.62% year-on-year, with a gross profit margin of 16.17%, and a year-on-year increase of 3.81 pct. According to EESA, in 21-23, the company ranked first in the country in the number of domestic energy storage third party high-power PCS shipments of 215kW or more in China.

At the same time, the company is also promoting product development and introduction of household energy storage and industrial and commercial energy storage systems to achieve full coverage of the energy storage business. As described in “Domestic Energy Storage Is Expected to Maintain Rapid Growth in 24 Years” (240412), the domestic energy storage market is expected to continue to expand in 24 years under multiple factors such as strong bidding data, price reduction in the optical storage industry chain, and an increase in allocation and storage coefficient. We expect the installed capacity to reach 65.1 to 79.9 GWH in 24 years, with a neutral growth rate of 56%. The company is expected to benefit significantly as a domestic high-power PCS leader.

PV inverters: Performance has been growing steadily. The distributed or new growth point The company's photovoltaic inverter business achieved operating income of 2,879 billion yuan in 23 years, +135.13% year over year, gross profit margin 20.25%, and +0.61 pct year over year. PV inverter sales in '23 were 23.47GW, +132.65% YoY; the unit price was 0.123 yuan/W, +1.07% YoY. According to S&P Global, the company's PV inverter product shipments ranked fourth in China and eighth in the world in 2022, and the company's inverter shipments continued to maintain the top ten global industry positions for many years. The company has now completed product development certification for the 3 to 125 kW full power range, and we expect distributed business to create new growth points for the company's performance.

Risk warning: The development of the industry fell short of expectations, market competition intensified, and the increase in upstream raw materials exceeded expectations.