Incident: The company released its first quarter report stating that net profit attributable to owners of the parent company for the first quarter was 154 million yuan, up 297.18% year on year; operating income was 1,814 billion yuan, up 122.47% year on year; basic earnings per share were 1.14 yuan, up 293.1% year on year.
The company's leading position is stable, and the demand side of the bracket industry continues to improve. Due to falling prices in the middle and upstream of the photovoltaic industry chain, the scale of investment and construction of centralized terrestrial power plants in the downstream market continues to increase, and demand for bracket products has expanded accordingly. The company is in a leading position in the field of photovoltaic stents. It has successfully seized growth opportunities and continuously promoted a global strategy. The market share in the Middle East and Latin America market has increased, and it has received orders for overseas GW tracking bracket system projects. At the same time, the company has seized good market opportunities and actively invested in R&D, and the core competitiveness of future products will be further strengthened.
The company has a forward-looking layout in overseas markets and has sufficient orders for tracking brackets in hand. In order to continuously expand its market share, the company is actively expanding production capacity. The company invests no more than 60 million US dollars to build a subsidiary in Saudi Arabia; invests in the construction of a 3GW production base in Brazil to explore the Latin American market; and expands the production capacity of supporting structural parts for tracking brackets by about 2 GW in India, which can meet the localization requirements of overseas tracking bracket orders in the future. As of March 31, '24, the company had orders of about 6.8 billion yuan, of which the tracking bracket system was about 5.9 billion yuan and the fixed bracket was about 800 million yuan. The gross profit of tracking brackets is relatively high, and at the same time, the share of sales scale has increased rapidly, leading to a continuous increase in the company's overall profitability.
Investment advice: Due to the company's sufficient tracking orders this year, shipments are expected to maintain high growth this year. We expect the company to achieve revenue of 105.04/139.09/17.568 billion yuan in 2024-2026, net profit to mother of 6.84/9.15/1,226 billion yuan, EPS of 5.04/6.74/9.03 yuan, and PE 17/13/9 times, maintaining the “recommended” rating.
Risk warning: Market competition intensifies; market demand falls short of expectations; risk of economic fluctuations.