The company released its 2023 annual report. The full year of 2023 achieved revenue of 4.933 billion yuan, +110.9%, net profit to mother of 286 million, year-on-year +250.5%, gross profit margin of 19.2%, year-on-year +1.9pct: 23Q4 achieved revenue of 1,622 million, +43.1% month-on-month, net profit of 77 million yuan, year-on-year +114.1%, month-on-month +5.6%, gross profit margin 18.7%, year-on-year +1.1 pct, year-on-month -5.0 pct.

The company released its 2024 quarterly report. 24Q1 achieved revenue of 711 million yuan, +14.7% YoY, +39.9% YoY net profit, +39.9% YoY, -34.0% month-on-month, gross profit margin 23.5%, YoY +4.4pct, month-on-month +4.9pct Performance Review: (1) 23Q4 net profit increased month-on-month, mainly due to the month-on-month increase in optical storage business shipments, which led to performance growth. (2) Net profit from 24Q1 increased 40% year-on-year, exceeding expectations. Mainly, shipments of photovoltaic inverters to overseas markets exceeded expectations, contributing to the increase while increasing marginal profit.

Revenue split in 2023: PV inverter revenue of 2.88 billion, +135% YoY, gross profit margin +0.6pct, achieving 23.5 GW of shipment, +133% YoY; energy storage business revenue of 1.93 billion, +89% YoY, gross profit margin 16.2%, +3.8pct yoy; power quality control revenue of 90 million, +42% YoY; spare parts and technical service revenue of 0.3 billion, +21% YoY.

Optical storage business product broadening+market expansion. From the product side, string inverters cover 3-350kW full-power range products, and centralized inverters cover 2500-8800 kW power range products, achieving full-scenario applications. AC energy storage inverters have a 125-800OKW product series. The DC energy storage converter can be expanded to a MW level system using a 182 kW modular design. Furthermore, the integrated energy storage system is highly integrated, intelligent, efficient and safe, and is suitable for energy storage areas such as power generation side, power grid side, user side and microgrid.

From the market side, on the domestic side, closely following the construction of a large scenic base, in the context of ground power plant emissions, the company is expected to achieve rapid shipment growth with its leading position. On the overseas side, the company will focus on anchoring the optical storage business in Europe, the Middle East, North America, Southeast Asia, Brazil and other markets on the basis of continued growth in the Chinese and Indian markets. At present, on the basis of completing distributed product certifications in major European countries, it is expected that large-scale sales will be formed in major European countries such as Germany, Italy, and Spain. At the same time, high-power energy storage PCS has received orders for several 100 megawatt projects in the North American market, and high premiums in the US energy storage market are expected to further enhance the profit center. Market structure and product structure optimization continue to contribute to performance growth.

Profit forecast and investment rating: Considering market competition and market expansion progress, we are revising the company's performance. We expect the company to achieve net profit of 5.1/7.4/1.03 billion yuan in 24-26, respectively. “The previous forecast value is 7.9/1.23 billion in 24-25 years”, +78%/+44%/+41% over the same period last year. The PE corresponding to the current stock price is 19.1/13.2/9.4 times, respectively, maintaining the “buy” rating.

Risk warning: demand falls short of expectations; competition intensifies; raw material prices fluctuate; production capacity progress falls short of expectations, etc.