Key points of investment
Rapid growth in revenue scale, with cost forecasting affecting profit growth: in 2023, the company's revenue was 8.09 billion yuan, net profit to mother was 90.1 billion yuan, +6% year on year, net profit before return to mother was 860 million yuan, +8% year on year; 2023Q4 revenue of 2.98 billion yuan, net profit of 200 million yuan year on year, +14% year on year, net profit without return to mother was about 195 million yuan, +20% year on year; 2024Q1 revenue of 2.22 billion yuan, +92% year on year, net profit to mother of 260 million yuan Compared to +18%, net profit without return to mother was 220 million yuan, +14% over the same period last year. The profit growth rate was not as high as the revenue growth rate, mainly due to increased expenses for R&D, production expansion, etc., and there was a mismatch between revenue recognition and expenses. We believe that in the future, with the accelerated acceptance of HJT equipment, profits are expected to grow rapidly. We expect 2023Q4 to have about 6 HJT inspections, corresponding to 3.6 GW, corresponding revenue of about 1.3 billion yuan, accounting for 44% of revenue; 2024Q1 will have about 8 HJT line inspections, corresponding to 4.8 GW. According to 370 million yuan/GW, corresponding revenue will be about 1.8 billion yuan, accounting for about 81% of revenue.
The share of HJT revenue with high gross profit increased in 24Q1, and profitability rebounded compared to Q4: in 2023, the company's gross margin was 30.5%, -7.8pct year on year; net sales margin was 10.8%, year-on-year -9.1pct, period expense ratio 19.3%, year-on-year -0.8pct, of which the sales expense ratio was 8.2%, +0.9pct year on year, and management expense ratio (including R&D) was 11.9%, year-on-year, -3.2 pct, and financial expense ratio was -0.8% year-on-year, +1.6 pct year on year. 2023Q4 gross margin was 27.1%, net sales margin 6.9%, 2024Q1 gross margin was 30.9%, and net sales margin was 10.8%. Mainly, the revenue recognition ratio of HJT with high gross margin in Q1 was higher than that of screen printing equipment, which rebounded compared to 2023Q4.
Contract liabilities and inventory increased, accounting for a high proportion of products issued: as of the end of 2023, the company's inventory was 10.8 billion yuan, +102% year over year, of which the products issued were about 7.28 billion yuan, accounting for about 67.5%, and contract liabilities were 8.46 billion yuan, +96% year over year.
Net operating cash flow in 2023 was 760 million yuan, -12% year on year; 2024Q1 net operating cash flow was 0.1 billion yuan, -98% year over year, mainly due to a significant increase in orders, leading to an increase in storage materials, especially a significant increase in the purchase amount of customized materials, long-delivery materials, and imported materials.
Maiwei has the capacity to supply the entire HJT line. Strong: We expect the number of new HJT entrants to continue to increase in 2023. For new players who cross borders, if HJT makes a profit, the layout of HJT will be successful, while leading companies, especially those with a large amount of old TopCon production capacity, will choose to lay out HJT if the net profit or return on investment per watt is not lower than TopCon. The high market share of Maiwei shares is expected to be maintained. We expect the company to sign a new HJT order of about 35GW in 2023, with a market share of 70% +.
Maiwei actively lays out display & semiconductor packaging equipment: (1) Display (OLED&MLED): Since 2017, Maiwei has laid out the display industry and launched OLED G6 Half laser cutting equipment, OLED bending laser cutting equipment, etc.; in 2020, the company extended its business to the new display field, launched a full set of equipment such as wafer invisibility, fragmentation, and laser bonding for MiniLED, and launched a full set of equipment such as wafer bonding, laser peeling, laser giant rotation, laser bonding and repair for MicroLED The industry provides complete line process solutions. (2) Semiconductor packaging: The company launched the localization of equipment such as laser grooving, laser modification cutting, knife wheel cutting, and grinding of semiconductor wafers, and focused on semiconductor pan-cutting and 2.5D/3D advanced packaging to provide overall packaging process solutions.
Profit forecast and investment rating: Considering the pace of equipment inspection, we lowered the 2024-2025 net profit to mother of 15.24/2,277 billion yuan, the previous value was 19.56/3,038 billion yuan, and the net profit forecast for 2026 was 2,883 billion yuan, corresponding to the current PE price of 19/13/10 times, maintaining the “buy” rating.
Risk warning: Downstream production expansion falls short of expectations, and new product expansion falls short of expectations.