Core views:
The company released its 23 annual report and 24Q1 quarterly report. In '23, the company achieved revenue/net profit attributable to mother/ net profit excluding net profit of 722.51/94.40/9.216 billion yuan, +79.47%/+162.69%/+172.18%; gross profit margin of 30.36%, +5.81 pct year on year; net profit margin 13.30%, +4.12 pct year on year. 24Q1 achieved revenue/net profit attributable to mother/ net profit excluding non-attributable net profit of 126.14/20.96/2,083 billion yuan, or +0.26%/+39.05%/+42.84% year-on-year; gross margin/net margin were 36.67%/16.71%, respectively, +8.67/+4.55pct. The year-on-year increase in performance is due to the company's brand premium, product innovation, scale effect and freight reduction, and the impact on exchange earnings.
The share of the inverter business is basically stable, and the industrial application of power plant products is increasing. The company's 23-year PV inverter business revenue was 27.653 billion yuan, +75.94% year-on-year, and the global delivery volume was 130 GW. The company has 490+ service outlets around the world, and the channel business is developing rapidly. As of December '23, the cumulative number of orders for 1+X modular inverters worldwide exceeded 45 GW; the revenue from the power plant system integration business was 24.734 billion yuan, +113.15% over the same period last year, and the development and construction of photovoltaic/wind power plants exceeded 40 GW.
The share of energy storage business has increased and revenue has grown rapidly, creating a professional supplier of integrated energy storage systems.
The company's energy storage business revenue in '23 was 17.802 billion yuan, +75.79% year over year; gross profit margin was 37.47%, +14.23pct year on year, with significant improvement in profitability. Energy storage systems are shipped 10.5 GWh globally throughout the year. They are widely used in mature electricity markets such as the US, UK, and Germany. The delivery volume is the highest among Chinese companies for eight consecutive years.
In '23, the company released the world's first 10MWh fully liquid-cooled energy storage system. Shipments are expected to accelerate as the “three-point integration” energy storage system is promoted and the deep integration of wind and solar storage continues to be strengthened.
Profit forecasting and investment advice. The company's EPS is expected to be 6.90/8.75/10.55 yuan/share in 2024-2026. The company's inverter shipments will grow steadily, the energy storage business will gradually expand, the overseas share will help increase profits, and there are plenty of orders on hand. Referring to comparable companies, give them a PE valuation of 15 times their 2024 performance, corresponding to a reasonable value of 103.51 yuan/share, and continue to give them a “buy” rating.
Risk warning. The global PV installed growth rate fell short of expectations; exchange rate fluctuations affected demand in some countries; risk of large price fluctuations in the industrial chain, etc.