Brief performance review
On April 26, the company disclosed the 2023 report and the 2024 quarterly report. In 2023, it achieved revenue of $59.146 billion, and achieved net profit of 3.416 billion yuan, or -49.9% year-on-year; of these, Q4 achieved revenue of 10.492 billion yuan, -38.9% year-on-month, and realized net profit to mother of -2,772 billion yuan, -252.5% year-on-year and -267.8% month-on-month.
1Q24 achieved revenue of 9.933 billion yuan, -43.6% YoY, -5.3% month-on-month, and realized net profit of 880 million yuan, or -139.0% YoY.
Management analysis
Silicon wafer shipments continue to grow, leading the industry in advanced production capacity scale. In 2023, the company shipped 114 GW of silicon wafers, +68% over the same period, and the overall market share of silicon wafers was 23.4%. Among them, the overseas silicon wafer export market accounted for 65% and the N-type market share was 36.4%, maintaining the first place in the export market. The company continues to promote technological innovation and Industry 4.0 flexible manufacturing to increase the scale of advanced production capacity. By the end of 2023, the company's crystal production capacity will reach 183 GW, which is expected to drive the company's shipments to continue to grow. 1Q24's silicon wafer shipments increased 40% year over year to 35GW. Among them, the share of N-type and large-size (210 series) increased further to 88%, and the export market share of N-type 210 was over 90%, continuing to maintain its leading position in the industry.
Reduced prices for silicon wafer products put pressure on profits, and asset impairment and changes in fair value affect the company's performance. Competition in the photovoltaic industry chain intensified in the fourth quarter of '23, and silicon wafer prices fluctuated greatly. The gross margin of 23q4 companies fell 15.9 pct to 6.94% month-on-month, and further declined to 5.56% in 24Q1. In addition, factors such as the new California distributed photovoltaic regulations and continued high interest rates in the US caused the participating company Maxeon's performance and stock price to drop sharply. The company confirmed asset impairment losses and fair value change losses of 10.1 million yuan and 440 million yuan. At the same time, in 2023, the company confirmed Maxeon's investment losses of 340 million yuan and received interest income of 108 million yuan from convertible bonds, which had a total negative impact on the company's performance.
It is leading the industry in technology, technology, and capacity layout, and is expected to consolidate its leading position. The company continues to lead the technology and process in the silicon wafer industry. At the end of 2023, it is expected to achieve a profit level superior to other companies in the industry in the context of profit pressure in the silicon wafer industry. Furthermore, the company continues to promote the global strategy of the photovoltaic industry, actively evaluate and explore industrial layout projects in key countries or regions around the world (such as the United States, Europe, the Middle East, etc.), and is expected to continue to consolidate its leading position with the advantages of a global layout.
Profit Forecasts, Valuations, and Ratings
According to our forecast on silicon wafer prices and competitive patterns, net profit for 2024-2025 was lowered to 28 (-71%) and 37 (-71%) billion yuan, and an additional 2026 forecast of 4.4 billion yuan was added. The PE corresponding to the current stock price is 14/11/9 times, respectively, maintaining the “buy” rating.
Risk warning
Competition in the industry has intensified, and industry demand has fallen short of expectations.