Revenue increased significantly in 2023. HJT battery line equipment revenue confirmed the company's revenue of 8.089 billion yuan (yoy +94.99%) in 23, and net profit of 914 million yuan (yoy +6.03%). Benefiting from the boom in the photovoltaic industry in 2023, the company's orders increased dramatically, and revenue increased year-on-year. 24Q1's revenue was 2,218 billion yuan (yoy +91.80%), and net profit to mother was 260 million yuan (yoy +17.79%). In 2023, the company confirmed the order revenue for HJT battery line equipment from Huasheng and other companies, and HJT equipment is expected to drive the company's revenue to continue to grow. We expect net profit due to mother in 2024-2026 to be 1,752,595/2,802 billion yuan, respectively, and the average PE of comparable companies in 24 years will be 26 times higher (Wind agreed). The company was given 26 times PE in 24 years, with a target price of 163.28 yuan (previous value of 175.69 yuan) to maintain “purchase”.
The high increase in contract debt in 2023 confirms that the company has plenty of orders in hand. HJT equipment's acceleration in revenue recognition benefits from TopCon's expansion of production, which brings more screen printing orders, and the acceleration of HJT production. The company's contract debt and inventory have increased dramatically, confirming that there are plenty of orders in hand. By the end of 2023, the company's contract debt was 8.455 billion yuan, an increase of 96.34% over the end of '22, mainly due to an increase in the company's orders and an increase in advance payments received from customer contracts. At the end of 2023, the company's inventory was 10.781 billion yuan, up 102.26% from the end of '22.
In '23, the company confirmed HJT equipment revenue from companies such as Huasheng and Ou Hao New Energy Power, which contributed to the high overall revenue growth of the company in '23 and 24Q1.
Affected by downstream cost reduction demands and increased industry competition, the company's profitability was under pressure. The company's gross margin in 2023 was 30.51%, -7.79pp year on year; net interest rate was 10.81%, -9.06pp year on year. The decline in the company's gross margin is mainly affected by the continued demand for cost reduction from downstream customers and increased competition in the photovoltaic market. The gross margin of the company's screen-printing line equipment has declined significantly. Heterojunction equipment is gradually increasing but is limited by scale effects, and its gross margin has not yet supported the increase in the company's overall gross profit. 24Q1's profitability was still under pressure, with gross margin of 30.93%, -3.10pp, and +3.88pp month-on-month; net margin was 10.84%, -6.86pp, and +3.93pp month-on-month. In 2023, the company's sales/management/R&D/finance expenses rates were 8.25%/2.43%/9.44%/-0.80%, respectively, +0.89/-2.34/+1.59pp, with a period cost ratio of 19.32% and -0.75pp.
Develop half-chip HJT battery equipment with 1GW production capacity, and continue to increase semiconductor and panel equipment R&D companies rely on vacuum, laser, and precision equipment technology research and development. 1) Screen printing equipment: The company's steel screen printing has entered the trial production stage, which can save 15% to 25% of low temperature slurry, and each GW can save customers tens of millions of costs. 2) HJT complete line equipment: The company's 1GW high-capacity HJT equipment/HJT copper electroplating equipment has entered the prototype stage, NBB main grillless string welding has begun trial production, and full-scale perovskite/HJT lamination technology research and development. 3) Pan-semiconductor equipment: The company has accumulated and expanded the display panel equipment and semiconductor packaging equipment market with its own laser technology. Currently, the company's Micro LED massive transfer equipment and semiconductor wafer grinding and polishing all-in-one machines have been successfully shipped to leading domestic display and packaging manufacturers.
Risk warning: Customer production expansion or overseas demand falls short of expectations, equipment acceptance slows down, and industry competition intensifies.