Incident: The company released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved revenue of 72.25 billion yuan, +79% year over year; realized net profit of 9.44 billion yuan, +163% year over year; realized net profit without return to mother of 9.22 billion yuan, +172% year over year. In 2024, Q1 achieved revenue of 12.61 billion yuan, +0.3% year over year; realized net profit of 2.1 billion yuan, +39% year over year; realized net profit of non-return to mother of 2.08 billion yuan, +43% year over year.
Comment:
Technological progress is compounded by channel expansion, and the photovoltaic inverter business is growing rapidly. In 2023, the company's photovoltaic inverter business shipped 130 GW globally, achieving revenue of 27.7 billion yuan, +61% year over year; gross margin was 37.9%, +5.5 pct year on year. As a leader in inverters, the company has profoundly benefited from the rapid development of the photovoltaic industry. The high-power string inverters SG320HX and 1+X modular inverters launched by the company have been widely and thoroughly used in various scenarios around the world; the company's newly developed DC 2000V high voltage inverter was successfully connected to the grid in the “Mengjiawan Photovoltaic Project” in Yulin, Shaanxi; the company continues to increase its layout in the European, American, Australian and Chinese channel markets to accelerate the development of global channel business.
Deeply involved in overseas markets, the profit margin of the energy storage business increased. In 2023, the company's energy storage system business shipped 10.5 GWh globally, achieving revenue of 17.8 billion yuan, +76% year over year; gross margin was 37.5%, +14.2 pct year on year.
As a leader in energy storage systems, the company is profoundly benefiting from the rapid development of the energy storage industry. The sharp increase in gross margin in 2023 is mainly due to the decline in cell prices and scale effects. In the terrestrial power plant scenario, the company launched the “three-electric fusion” PowerTitan 2.0 liquid-cooled energy storage system; in the industrial and commercial scenario, the company innovatively proposed a “three-electricity integrated intelligent storage” PowerStack energy storage system solution.
New energy investment and development business has been scaled up, and profitability has been greatly improved. In 2023, the company's new energy investment and development business achieved revenue of 24.7 billion yuan, +113% year-on-year; gross margin was 16.4%, +4.6pct year-on-year. The increase in gross margin was mainly due to the rapid decline in component prices in 2023. The company's new energy development business has a comprehensive layout in the fields of terrestrial power plants, industry, commerce, and household use. At the same time, it is also continuing to explore overseas markets, which is expected to contribute to the company's continuous growth in performance.
Profit forecast, valuation and rating: Considering the intensification of competition in the optical storage industry, we lowered the company's 24-25 profit forecast and added a 26-year profit forecast. The company is expected to achieve net profit of 105/117/13.1 billion yuan in 24-26 years (down 4% /12% /increase). The current stock price corresponding to 24-26 PE is 14/12/11 times.
The company's inverter sales are still growing rapidly. Combined with the growth space brought by the energy storage business, we continue to be optimistic about the company's long-term development and maintain a “buy” rating.
Risk warning: PV installation and overseas market expansion fall short of expectations; increased competition may lead to a decline in profits.