Key points of investment
Q1 Results exceeded market expectations. 24Q1 revenue was 11 billion yuan, up 5%, down 19%; net profit to mother was 320 million yuan, down 293%, up 17%, net profit from non-return to mother was 280 million yuan, down 213%, and 23%. Q1 gross profit margin 17%, up 2.8/1.5pct year on month; net profit margin 2.9%, +4.5/0.9pct month on month; deducted non-net interest rate 2.5%, +4.9/-0.1pct month-on-month.
Q1 power shipments increased year over year and are expected to double in 24 years. Shipments of Q1 dynamic storage batteries were about 4 GWH, a year-on-year increase of nearly doubling. The performance was strong, with 0.5 GWH of energy storage cells. In terms of product structure, plug-ins and extenders account for about 30%, pure electricity accounts for 40%, and overseas accounts for about 20%. Production schedules increased month by month from April to April, and Q2 shipments are expected to increase by 20% +. Considering the initial volume of downstream customers, the company is expected to ship about 20 GWH in '24, double the same as the previous year, which is higher than the industry's growth rate, with energy storage cells contributing about 2 GWH. The Q1 energy storage system is shipped 1.5-1.6 GWH. It is estimated that the energy storage system will be 6-8 GWH in 24 years, an increase of 50% +.
Q1 Power loss was lower than expected, and there was a slight loss in energy storage. Q1 power loss was 400 million +, loss increased by about 30% month-on-month, equity loss was nearly 200 million yuan, unit loss -0.1 yuan/wh, down 0.02 yuan from 23Q4, gross margin was about 12%, a slight increase from month to month, but losses widened due to cost increases during the commissioning of several bases.
Q2 After the increase in shipments, the scale effect is expected to dilute costs. Losses are expected to narrow month-on-month, the company will continue to reduce costs and increase efficiency, and the power business is expected to reduce losses in 24 years. Q1 The gross margin of the energy storage system also increased by 3-4 pct, with an overall slight loss.
Lithium-ion performance exceeded expectations, and the battery self-supply rate continued to increase. Revenue from the Q1 consumer sector also increased by 20% +, and gross margin increased by 3 pct, which is expected to contribute 3-4 billion dollars. The year-on-year increase in profit was due to an increase in the self-supply rate of batteries. The self-supply rate of Q1 laptops was nearly 20%, up nearly 10 pct from 23, and the mobile phone self-supply rate was about 35%.
Q1 Li-Wei's revenue increased by about 40%, and gross profit margin was 20% +. Currently, consumer electronics continues to recover. The consumer sector business revenue is expected to maintain a growth rate of about 10% in 24. The increase in the self-supply rate of cells brings profit elasticity, and profits are expected to improve marginally.
The cost rate increased slightly from month to month, and inventory increased slightly compared to the beginning of the year. The total cost for the Q1 period was 1.6 billion yuan, -2.7%/-15% compared to the same period. The rate for the period was 15%, -1.1/+0.7pct compared to the same period. Q1 The company's inventory was 7.4 billion yuan, up 5% from the beginning of the year, mainly for the advance layout of power and consumer batteries; contract liabilities were 890 million yuan, up 48% from the beginning of the year. Q1 The company's net operating cash flow was $710 million, up 167%; net cash flow from investment was 2.4 billion yuan, down 3%; capital expenditure was 1.9 billion yuan, -0.3% year over year; book cash was 17.1 billion yuan, down 7% from the beginning of the year, and short-term loans were 8.4 billion yuan, down 4.7% from the beginning of the year.
Profit forecast and investment rating: Considering that the company's dynamic shipments are expected to increase, we maintain a 24-26 net profit forecast of 14/18/23 billion yuan, +32%/29%/23% year-on-year, corresponding PE is 18/14/11x, respectively, maintaining a “buy” rating.
Risk warning: Electric vehicle sales fell short of expectations, and industry competition intensified.