Event: The company released its 2024 quarterly report. 2024Q1 achieved operating income of 464 million yuan, an increase of -19.30% year on year, and realized net profit of 53 million yuan, an increase of 17.21% year on year.
Profitability has increased, and expenses have changed a lot. Gross profit margin: 2024Q1's gross margin increased 4.13pct year-on-year to 20.46%. Rate side: 2024Q1 sales/management/R&D/finance rate was 0.86%/6.08%/2.34%/0.16%, year-on-year change -0.35pct/2.91pct/-1.42pct/-0.07pct. The decline in sales expenses was mainly due to a reduction in foreign trade promotion expenses for the subsidiary Fuller New Energy; the increase in management expenses was mainly due to an increase in operating expenses for the subsidiary Hangzhou Xingshuaier Photovoltaic Technology Co., Ltd.; the decline in R&D expenses was mainly due to product reduction in R&D expenses due to the subsidiary Fuller New Energy's R&D activities. Net interest rate: The company's 2024Q1 net interest rate changed by 3.33pct to 11.59% year-on-year.
Cash flow is healthy, and advance payments for the new energy business are high. Cash flow: 2024Q1 received 527 million yuan in cash from sales of products, an increase of 53.18% over the previous year. Assets and liabilities: The 2024Q1 contract liability of the company was $06 billion, an increase of 286.41% over the previous month, mainly due to an increase in advance payments received by the subsidiary Fuller New Energy.
Outlook: Based on the home appliance sector, led by the new energy sector. 1) Home appliance business: The company's current white goods business has a high market share and strong customer stickiness. In the future, the company will increase investment in R&D, maintain steady growth in performance, and expand the upstream, middle and downstream industrial chain. 2) PV module business: At the end of January 2024, the infrastructure project of Xingshuaier Photovoltaic Company was officially put into operation, and production capacity is gradually climbing. In the future, it is planned to further achieve 5GW/year production capacity in the shortest possible time.
Profit forecasting and investment advice. Considering the company's current PV business development progress and performance in 2023, we expect the company to achieve net profit of 2.41/2.93/358 million yuan in 2024-2026, an increase of 19.1%/21.4%/22.2% year-on-year, and maintain an “increase” investment rating.
Risk warning: Prices of raw materials fluctuate greatly, the expansion of the photovoltaic energy storage business fell short of expectations, and demand in the white power industry fell short of expectations.