Event: The company released its 2023 annual report and 2024 quarterly report. 23 The full year achieved revenue of 31,655 billion yuan, +37.1% year-on-year; net profit to mother was 939 million yuan, +201.3% year-on-year, after deducting non-return net profit of 116 million yuan, reversing the year-on-year loss. 24Q1 achieved revenue of 7.508 billion yuan, +4.6%/-23.6% year on month; net profit to mother of 0.69 million yuan, -8.6%/-89.3% year on month; net profit without return to mother of 11 million yuan, reversing loss year-on-year/-83.8% month-on-month. The company's 23 annual performance growth performance was impressive, and net profit to mother increased significantly.
The customer structure is constantly being optimized, and energy storage shipments are growing rapidly. In '23, the company achieved main revenue of 29.983 billion yuan, +36.4% over the same period last year. We estimate that a total of 43 GWh of moving storage was shipped. Power: Achieved revenue of 23.51 billion yuan in 23 years, +24.7%, domestic installed capacity of 15.9 GWh, and excellent performance with models such as Wuling Bingguo/Euler Haomao/Changan Lumin. At the same time, it is expected that the customer structure will continue to be optimized in the future by expanding powerful B-class models, adding new Nacha/Aian and Volkswagen standard batteries, and is expected to establish a strategic cooperative relationship with NIO. Energy storage: Achieved revenue of 6.932 billion yuan in 23 years, or +97.6% over the same period. The company was selected by BNEF as a global Tier 1 energy storage product supplier. Currently, it has relatively abundant orders, and continues to contribute to increased performance with major domestic and international storage/household storage strategic cooperation projects such as Sumeda/South Grid Energy Storage/Japan Edison. We believe that with the deepening of cooperation between the company and domestic and foreign customers and the continuous release of superimposed production capacity, the company's shipments are expected to maintain rapid growth, and battery shipments are expected to reach 55 GWh in 24 years.
Various expenses continued to improve, and the profit side rebounded steadily. The company's gross profit margin in '23 was 16.9%, -0.9 pct year on year, and -1.1 pct in 24Q1. The slight year-on-year decline in gross margin was mainly due to the increase in short-term electricity depreciation and amortization after the company accelerated production expansion, offsetting the impact of the decline in some raw materials. The decline on the cost side was slightly lower than the reduction in battery unit price on the reporting side. It is expected that future production capacity will rise and be repaired after the scale effect is released. The company's expenses continued to improve. The total expenses for the 23-year period were 15.8%, -1.1 pct year on year. Thanks to the dilution of the company's scale effect and the improvement in management capacity and operating efficiency brought about by the full introduction of the Volkswagen Group management system, the cost rate declined for four consecutive years, driving a steady recovery in the company's profit side. The company's net interest rate in '23 was 3.1%, +1.5pct year on year. The 24Q1 net interest rate was 0.5%, -1.0pct/-5.7pct, and the period expense ratio was 15.3%. The month-on-month decline maintained a downward trend. The decline in net interest rates was mainly due to a reduction in corporate government subsidies.
The results of the globalization strategy are gradually showing, and overseas competitive advantage is expected to continue to improve. In '23, the company achieved overseas revenue of 6.428 billion yuan, +115.7% year-on-year, and overseas revenue accounting for 20.3%, or +7.4 pct year-on-year. A total of 4 PACK production sites in Germany, the United States, Thailand, and Indonesia have been put into operation and shipment, marking the beginning of the harvest period of the company's overseas production capacity. According to SNE Research statistics, the total installed capacity of the company's global dynamic storage capacity in '23 was 31 GWH, +64% over the same period, ranking 8th with a market share of about 3%. The company's globalization strategy has gradually become apparent.
The company's layout in the US from battery material processing to cell/PACK manufacturing has progressed steadily. It is expected that as IRA policy requirements will be tightened year by year, the company is expected to continue to improve its competitiveness in overseas markets with a high localized manufacturing ratio, Volkswagen Group shareholder support, and production-side cost advantages brought by its many years of LFP battery R&D and production experience. We are optimistic about the company's long-term global market share increase trend.
Profit forecast and investment rating: From 2024 to 2026, the company is expected to achieve operating income of 384.80/485.38/58.328 billion yuan, +21.8%/+26.1%/+20.2% year-on-year, and achieve net profit of 11.02/16.37/ 2,235 billion yuan, +17.4%/+48.5%/+36.5% year-on-year. The PE corresponding to the current stock price is 29x/19x/14x. In the short term, the company may face profit-side pressure due to increased market competition, improving customer and product structures or providing room for recovery; looking ahead, we believe that the company's global strategic layout has gradually emerged, with overseas production capacity leading the industry and a complete industrial chain layout in the US, which is expected to continue to enhance global competitiveness, fully benefit from the profit advantages and growth potential of overseas markets, and maintain a “highly recommended” rating.
Risk warning: Increased demand for terminals, progress of company-public cooperation/mass sales, company capacity construction, and improvement in company cost/profit fell short of expectations, and increased industry competition exceeded expectations.