Key points of investment

2024 Q1 performance: 144% year-on-year increase; expected to accelerate breakthroughs in perovskite equipment 1) Performance: revenue of 2.03 billion yuan, up 53% year on year; net profit to mother 130 million yuan, up 144% year on year.

2) Profitability: gross profit margin 19.6%, same year on year; net profit margin 7.7%, up 3 pct year on year.

3) Orders: As of the end of the first quarter of 2024, the company's contract debt was 3.28 billion yuan, an increase of 30.5% over the previous year.

4) R&D expenses: Q1 2024 reached 105 million yuan, a year-on-year increase of 55.9%, accounting for 5.2% of revenue.

2023: Performance increased 11.5% year over year; active PV orders increased 80% year over year 1) Performance: revenue of 7.2 billion yuan, up 48% year on year; net profit to mother was 340 million yuan, up 11.5% year on year.

2) Profitability: In 2023, the company's gross profit margin was 21%, down 0.5 pct year on year; net profit margin was 5.5%, down 1.2 pct year on year.

3) Orders: As of the end of 2023, contract liabilities reached 3.69 billion yuan, an increase of 124.7% over the previous year. By the end of 2023, the company's PV sector had orders of 9.779 billion yuan (tax included), up 80% from 2022 and 6.3% from the 2023 interim report.

4) R&D expenses: In 2023, it reached 460 million yuan, a year-on-year increase of 72%, accounting for 6.3% of revenue.

Jingshan Light Machinery: The market space for perovskite equipment is large; component equipment and HJT+Topcon equipment are blooming at multiple points 1) Perovskite equipment: The company is a leading supplier of complete line equipment. Products include: perovskite solution preparation, glass cleaning equipment, magnetron sputtering equipment, coating drying and crystallization equipment, laser equipment, lamination equipment and auxiliary equipment. We have successfully obtained orders for multiple perovskite test lines and complete perovskite lines with MW production capacity, and cooperated with many customers to verify the process and build production lines ① PVD sputtering equipment - the company has independent intellectual property rights, PVD coating equipment and transparent conductive layer PVD coating equipment, and has mature mass production processes and experience.

② ALD atomic deposition equipment - Using spatial SALD technology, research atomic layer deposition technology suitable for perovskite battery electron transport layer SnO2 film layer and encapsulating water barrier layer Al2O3 film layer. Combined with the verification tests of the company's own complete line of perovskite batteries, equipment and processes for mass production of atomic deposition films with large production capacity and large space have been developed.

③ Evaporation equipment: The company's large linear evaporation equipment for perovskite uses innovative technology to achieve an effective width of 600 mm, successfully solves large-scale evaporation problems, and meets the rhythm requirements of online continuous production.

2) Component equipment: The company is a leader in automated component production line equipment, serving leading customers at home and abroad, and benefiting from the expansion of component production.

3) TopCon equipment: The company's core layout is TopCon 2-in-1 coating equipment (PECVD+PVD), and is looking forward to a breakthrough.

4) HJT equipment: The company cooperated with Jinshi Energy to clean velvet making equipment, and has delivered more than 10GW orders for velvet making and cleaning equipment.

Investment advice: A leader in perovskite equipment; PV modules and perovskite equipment are expected to grow more, and the company's net profit for 2024-2026 is expected to reach 5.9/69/8.4 billion yuan, an increase of 77%/16%/21% over the previous year, corresponding to PE 15/13/11 times. Maintain a “buy” rating.

Risk warning: New product marketing falls short of expected risks; risk of downturn in industry sentiment; risk of market competition.