Incident: The company announced its results for the first quarter of 2024. During the reporting period, it achieved operating income of 1,814 million yuan, or 122% year on year; net profit to mother of 154 million yuan, 297% year on year; deducted non-net profit of 143 million yuan, 882% year on year. Both revenue and profit greatly exceeded expectations.
Tracking bracket shipments exceeded expectations, and profitability was stable. It is estimated that in the first quarter of 2024, the company's tracking bracket shipment volume will be about 3 GW, with a unit profit of about 0.05 yuan/w; fixed bracket shipments will be about 1 GW, and the unit profit will be about 0.01 yuan/w. Since this year, the number of PV installations in India and the Middle East has grown rapidly. Thanks to the company's early global production capacity, channel layout, and early large-scale project delivery with overseas customers, the company has a high market share in India and the Middle East, fully benefiting from rising overseas demand.
The tracking stand reached a new high for in-hand orders. As of March 31, 2024, the company's current orders totaled 6.8 billion yuan, of which the tracking/fixing/other businesses were 59/8/10 billion yuan respectively, and in-hand orders for the three businesses at the beginning of the year reached a new high of 36/10/10 billion yuan. It is estimated that the company signed a new tracking stand order of about 35 to 40 billion yuan in Q1, which is about 7-8 GW at an average price of 0.5 yuan/w. Considering that the second and third quarter is the peak demand season, the company is expected to continue to receive new orders, and the performance is more certain.
Investment advice: We raised the company's 2024-2025 profit forecast and added a 2026 profit forecast. We expect the company's net profit to be 7.69/9.48/1,164 billion yuan (2024-2025 original value of 513/710 million yuan), corresponding to EPS of 5.66/6.98/8.57 (2024-2025 original value 3.78/5.23), respectively. We believe that the company, as a leading PV bracket company, is expected to fully benefit from the increase in overseas demand and maintain a “buy” rating.
Risk warning: demand for photovoltaic stents falls short of expectations; overseas market expansion falls short of expectations; risk of fluctuating raw material costs.