2024Q1 profit growth was steady. Fuller New Energy signed new orders. Maintaining the “buy” rating of 2024Q1, the company achieved revenue of 464 million yuan, -19.30% year on year, net profit to mother of 53 million yuan, +17.21% year on year, net profit after deducting 50 million yuan year on year, +19.13% year over year. The narrowing of profit growth rate from month to month was mainly due to the decline in revenue scale. The subsidiary has signed new orders for photovoltaic modules exceeding 1 billion yuan, and the basic market for home appliances is stable. We maintain the 2024-2026 profit forecast. The company's net profit for 2024-2026 is 2.6/3.1/350 million yuan, corresponding EPS is 0.8/1.0/1.2 yuan, the current stock price is 11.7/9.8/8.5 times PE, the basic market for home appliances is stable, and the new energy sector continues to expand, maintaining a “buy” rating.
Demand for compressors has increased, and PV has signed 1 billion new orders, and it is expected that it will expand the military business industry. The boom in the home appliance sector is driving a high demand for components. According to Industry Online, air conditioning production in March increased 26.9% year-on-year, driving an increase in demand for upstream compressor parts. There was even a shortage of supply in March.
According to data from the General Administration of Customs, the export volume of the 2024Q1 compressor industry increased 16.15% year over year. In the photovoltaic sector, according to the forecast of the China Photovoltaic Association, in 2024, China's new PV installed capacity reached 190 GW, a year-on-year decline; under optimistic conditions, there was a slight year-on-year increase of 220 GW; in 2024, the number of new PV installations worldwide remained conservative, reaching about 390 GW, and reached 430 GW under optimistic conditions. The company's PV customers are from home and abroad, and demand is expected to remain conservative and stable. On the company side, in 2024, its subsidiary Fuller New Energy signed a contract with China Energy Construction Dongdian for 1,014 billion yuan of photovoltaic module equipment, which is expected to strengthen the company's market share in the PV module field and contribute additional volume. The subsidiary Zhejiang Special Electric obtained the “Weapons and Equipment Quality Management System Certification Certificate” and the Central Military Commission issued the “Equipment Supplier Qualification Certificate”, indicating that the company complies with military equipment procurement standards and that the company is expected to undertake military goods business in the future and contribute to revenue growth.
2024Q1's profitability improved markedly, and sales/R&D/financial expenses decreased 2024Q1. The company's gross profit margin was 20.46%, +4.13pcts year-on-year, and +13.38pcts month-on-month. On the cost side, the 2024Q1 company's expense ratio was 9.45%, up 1.07pcts year on year. Among them, sales/management/R&D/finance expenses were 0.86%/6.08%/2.34%/0.16%, respectively, and -0.35/+2.91/-1.42/-0.07pcts year over year, respectively. The change in management expenses was mainly due to an increase in operating expenses for the subsidiary Xingshuier Photovoltaic Technology Co., Ltd. Under the combined influence, 2024Q1's net interest rate to mother was 11.38%, +3.54 pcts year on year, after deducting the non-net interest rate of 10.85%, and +3.50 pcts year on year. The company's profitability is still in the upward channel, or the company's product structure is optimized.
Risk warning: raw material prices fluctuate; capacity release falls short of expectations; new energy business expansion falls short of expectations.