Core views:

The company published an annual report for '23 and a quarterly report for '24. In 2023, the company achieved revenue of 4.933 billion yuan, +110.93%; net profit to mother of 286 million yuan, +250.48% year over year; achieved gross sales margin of 19.23% and net profit margin of 5.78%. 24Q1 achieved operating income of 711 million yuan, +14.71% year over year; net profit to mother of 51 million yuan, +39.91% year over year; achieved gross sales margin of 23.55%, up 4.88pct from month to month; net sales margin was 7.11%, up 2.37 pct from month to month.

The performance exceeded expectations, mainly due to the company's gradual breakthrough in overseas markets.

Shipments in the optical storage business continued to increase, and gross margins improved. In '23, the company's photovoltaic inverters achieved revenue of 2,879 billion yuan, +135.1% year on year; sales volume reached 23.47 GW, +132.65% year on year; gross profit margin of 20.25%, +0.61 pct year on year. In '23, the company's energy storage bidirectional converters and system integrated products achieved revenue of 1,927 billion yuan, +88.6% year over year; gross profit margin was 16.17%, +3.81 pct year on year. According to the EESA Energy Storage Leaders Alliance statistics, the company ranked first in the country in 2021, 2022, and 2023 in 2021, 2022, and 2023.

The company's overseas layout has entered a harvest period. During the reporting period, the company achieved overseas revenue of 690 million yuan, +105.75% year-on-year. In 2024, the company will continue to expand sales channels on the basis that it has completed distributed product certifications in major European countries, and will focus on anchoring optical storage business in Europe, the Middle East, North America, Southeast Asia, Brazil and other markets on the basis of continued growth in the Chinese and Indian markets.

Profit forecasting and investment advice. The company's EPS is expected to be 1.59/2.27/2.88 yuan/share in 24-26, respectively. Overseas shipments of the company's photovoltaic inverters will increase steadily, and energy storage inverters will gradually be released. Referring to comparable companies, the PE valuation is 20 times its 2024 performance, corresponding to a reasonable value of 31.77 yuan/share, and continues to be given a “buy” rating.

Risk warning. PV installations fall short of expectations, risk of falling product prices and gross margin, risk of exchange rate fluctuations, etc.