High year-on-year increase in performance, maintaining the “gain” rating
According to the company's 23 annual report, the company's total revenue for the full year of 23 was 118.682 billion yuan, an increase of 43.55%; net profit to mother was 7.440 billion yuan, an increase of 153.41%. The sharp increase in the company's performance compared to the same period last year was mainly due to the smooth implementation of N-type module production capacity and rapid shipment volume. Considering that the component sector is in an oversupply cycle, causing price pressure, we adjusted the company's 24/25/26 EPS to 0.58/0.61/0.64 yuan (previous value: 0.69/0.74/-yuan). Referring to Wind's consensus expectations, it is 6.75 times the company's PE in 24 years. Considering that the company's N-type TOPCON has a clear leading position and a relatively high advanced production capacity, it has a stronger competitive advantage compared to peers, giving the company 14 times PE in 24 years, corresponding to a target price of 8.12 yuan (previous value: 11.73 yuan), maintaining the “gain” rating.
N-type component head, integrated layout supports strong production and sales
In terms of shipments, the company shipped a total of 78.52 GW in 2023, of which type N shipped 48.41 GW, type N shipments accounted for about 62%, and type N shipments ranked among the highest in the industry. In terms of production capacity, at the end of 2023, the company's production capacity of silicon wafers, cells and modules will reach 85GW, 90GW, and 110GW respectively, with an integration rate of more than 85%. The company expects the production capacity of negatives, cells and modules to continue to expand to 120/110/130GW in '24. We are optimistic about the company's operating flexibility brought about by the release of integrated advanced production capacity, which is expected to support the company's continued strong production and sales.
Deep technology accumulation, leading the new technology industry
Currently, the industry is in a critical period of technological iteration. The company actively promotes new cost reduction and efficiency technologies such as LECO, 0BB, double-sided POLY, and TBC, and maintains dynamic technology leadership with other manufacturers. According to the company's annual report, the company expects TOPCON efficiency to reach 26.5% by the end of 24, leading the industry in efficiency. The company is also active in the field of perovskite. According to the company's official website, the company uses N-type TopCon as the base battery and perovskite to achieve high-efficiency laminated batteries, with a conversion efficiency of 32.33%, leading the transformation of photovoltaic technology. While we are optimistic that TOPCON can become the mainstream technology of crystalline silicon within the next 3-5 years, it can be integrated with next-generation lamination technology in the long term. We are optimistic that the company will maintain its dynamic leading position in N-type technology for a long time.
Businesses such as energy storage and BIPV are progressing steadily
According to the company's annual report, the company will firmly establish the layout of the energy storage industry. In 2023, the company's 4 GWh energy storage system production line has been successfully put into operation, and subsequent battery and system production capacity is progressing in an orderly manner. In terms of BIPV, the company's BIPV series of household tiles empowers green buildings. They use N-type TOPCON components, and the power generation efficiency has a high efficiency advantage compared to similar products. Furthermore, the company's BIPV uses a full-floor design to increase installed capacity and maximize power generation revenue.
Risk warning: TOPCON production capacity expansion falls short of expectations; risk of large fluctuations in industry prices; risk of industry demand falling short of expectations.