Q1 Profitability declined due to rising raw material prices
Kuike electronically published its 2023 annual report and 2024 quarterly report. In 2023, the company achieved revenue of 1,285 billion yuan, yoy +16.9%. Achieved net profit of 194 million yuan, yoy +63.5%, and realized net profit deducted from non-mother of 178 million yuan, yoy +56.8%, of which overseas revenue accounted for 38.65%, +11.21pct year-on-year. 2023Q4 achieved revenue of 295 million yuan, QoQ -13.4%, yoy +6.3%. Net profit to mother was 47 million yuan, qoq -20.1%, yoy +50.9%.
Net profit after deducting non-return to mother was 0.43 million yuan, qoq -19.1%, yoy +50.4%. 2024Q1 achieved revenue of 258 million yuan, qoq -12.7%, yoy -15.3%. Net profit of 40 million yuan to mother, QoQ -15.3%, YOY +3.6%. Net profit after deducting non-return to mother was 0.36 million yuan, qoq -17.2%, yoy -1.8%. Single Q1 gross margin and net margin were 20.0%/15.5%, respectively, -6.5/-0.5pct month-on-month, respectively. Considering that copper, the raw material for the company's junction box products, has entered an upward channel and competition for downstream components is under pressure. The company's net profit for 2024-2025 is expected to be 198/253 million yuan (originally 3.16/421 million yuan), an additional profit forecast of 315 million yuan for 2026. EPS is 2.37, 3.04, and 3.79 yuan, corresponding to the current PE price of 15.2, 11.9, and 9.6 times. Considering that the company continues to increase production capacity while actively expanding overseas customers, the market share of photovoltaic junction box products is expected to increase steadily and maintain a “buy” rating.
The revenue of the junction box business is growing steadily, and smart junction box products are expected to become the second growth curve. In 2023, the company's junction box business achieved revenue of 1,044 billion yuan, yoy +13.9%, gross margin of 21.9%, and yoy+3.6pct. Achieved sales of 62.684 million sets of junction boxes, yoy +27.8%. In 2024, the company will promote the IC chip-controlled smart junction box business on the basis of traditional junction boxes. Several R&D projects have entered the mass production stage to increase the market share of smart junction boxes. At the same time, the company actively explores overseas markets, develops distribution models, makes full use of the local resource advantages of dealers, and jointly promotes sales growth through “direct sale+distribution”.
Open up a new growth curve and focus on promoting energy storage connectors
The company's connector business achieved revenue of 216 million yuan in 2023, yoy +31.3%, gross profit margin of 27.9%, yoy+9.9pct, and achieved sales of 8.52 million units, yoy -0.3%. The significant increase in profitability is due to changes in product structure.
At the same time, in 2024, the company will focus on promoting the energy storage connector business.
Risk warning: Higher raw material prices lead to declining profitability and increased industry competition.