The company published an annual report for '23 and a quarterly report for '24. In 2023, the company achieved revenue of 3.752 billion yuan, +33.56% year over year; net profit to mother 502 million yuan, +88.18% year over year; achieved gross sales margin of 35.76% and net profit margin of 13.47%. 24Q1 achieved operating income of 549 million yuan, -10.04% year on year; net profit to mother of 55 million yuan, -29.46% year over year; achieved gross sales margin of 43.96%, up 5.01 pct month on month; net sales margin was 11.38%, down 2.09 pct from month to month. 24Q1 performance declined year-on-year, mainly due to engineering transmission revenue confirmation falling short of expectations.
New energy electronic control performance is steady, and photovoltaic inverters have achieved breakthroughs overseas. The company's new energy power generation industry achieved revenue of 3,099 billion yuan, +34.46% year over year; gross profit margin was 34.08%, +6.99pct year on year. Mainly due to the company's own product technology upgrades, the company's share of sales increased in high-margin overseas regions such as Turkey, Brazil, and Indonesia. According to the 23 annual report, the company's photovoltaic inverters achieved revenue of 1,276 billion yuan, +40% year over year; of these, overseas revenue accounted for 6.3%, +2.3 pct year on year.
Drive, energy storage, and hydrogen energy make more efforts to build a platform-based power electronics company. In '23, the company's engineering transmission achieved revenue of 481 million yuan, a year-on-year increase of +29.76%, gross profit margin of 45.57%, and a year-on-year increase of +0.98pct. In the field of energy storage, Hewang's energy storage products cover various equipment and related systems such as PCS, PCS box integrated machines, EMS, and outdoor industrial and commercial energy storage systems. In the field of hydrogen energy, Hewang provides 500kW~20MW high-power IGBT hydrogen power supply solutions, and is the first domestic manufacturer of MW-grade IGBT hydrogen power supplies that operate stably for a long time.
Profit forecasting and investment advice. The company is expected to have an EPS1.36/1.88/2.13 yuan/share in 2024-2026. The company's wind energy converter market share is high, photovoltaic inverter shipments are growing steadily, and energy storage inverters are gradually being released. Refer to comparable companies to give it a PE valuation of 20 times its 2024 performance, corresponding to a reasonable value of 27.23 yuan/share, and continue to give a “buy” rating.
Risk warning. PV and wind power installations fall short of expectations, risk of falling product prices and gross margin, risk of exchange rate fluctuations, etc.