Incident: The company released its 2023 annual report. In 2023, the company achieved operating income of 1,420 million yuan, +6.10% year-on-year, and realized net profit of 220 million yuan, or -38.92% year-on-year. Among them, 2023Q4 revenue was 452 million yuan, +10.01% year over month, and +45.48% month on month, achieving net profit to mother of 40 million yuan, -63.01% year on year, and -13.73% month on month. The performance was in line with expectations.

Microinverter shipments declined year over year in '23, and profitability declined year over year. Affected by changes in overseas inventories, the company shipped 842,000 microinverters in '23, or -9.91% year-on-year. Meanwhile, the gross margin of micro inverters in '23 was 36.13%, down 2.15 pcts year over year. In terms of new micro inverters, as of 2023, the company has launched a new upgraded product, the EZ1 micro inverse series product, for the European DIY small household photovoltaic scenario, which maintains the characteristics of the company's fourth-generation micro inverters. The input current is as high as 20A, which is more suitable for 182 and 210 high-power modules.

The industrial and commercial energy storage inverters were shipped smoothly. The company shipped about 306 industrial and commercial energy storage inverters in small batches in 2023. In 2023, the company mastered two core technologies, including string inverter control technology and string energy storage integrated cabinet system integration technology. Based on this, the 100kW/215kWh (air-cooled) and 200kW/402kWh (liquid-cooled) energy storage cabinets developed by the company have achieved coordinated control of various subsystems such as batteries, PCS, cooling systems, and fire protection systems. Among them, Ocean 400L Product Company independently developed it, and has various advantages such as 3S full-stack self-research, multiple applications, and intelligent liquid cooling temperature control. From the perspective of industrial and commercial energy storage solutions, the company's holding subsidiary Lingyu Energy focuses on industrial and commercial energy storage. As a professional industrial and commercial energy storage solution provider, it has safe energy storage system products that have passed strict tests, and has rich design experience for different site conditions, providing customers with cost-effective system solutions and boosting future performance.

Investment advice: The company's net profit for 24E-26E is estimated to be RMB 323/418/507 million yuan, respectively, +46.7%/+29.2%/+21.4% YoY, and EPS of RMB 2.88/3.73/4.53, maintaining a “buy” rating.

Risk warning: PV industry boom falls short of expectations, raw material prices fluctuate, market competition intensifies