Brief performance review
On April 25, the company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved revenue of 113.4 billion yuan, +33.3% year over year; net profit to mother of 5.531 billion yuan, +50.3% year over year; net profit after deducting non-return to mother of 5.755 billion yuan, +66.1% year over year. Q4/Q1 achieved revenue of $32.3 billion, +20.2%/-14.4%, month-on-month +1.7%/-43.4%; net profit to mother of 4.54 million, $516 million, -64.5%/-70.8%, and -70.4%/+13.5% month-on-month; net profit of 6.35 million, $447 million, year-on-year, -48.1%/-74.2%, month-on-month. Meets expectations.
Management analysis
Component shipments continue to grow, and a global strategy guarantees profit advantages. In 2023, the company shipped 65.21 GW of modules, an increase of 51.35%; according to 24Q1, the company shipped about 14 GW of modules, an increase of about 1 GW; the company's target for module shipments in 2024 was 80-90 GW, maintaining a high increase.
According to estimates, the company's profit per watt of Q1 components is about 0.03 yuan/W. Against the backdrop of a sharp drop in prices in the industrial chain, the company maintained relatively impressive profitability with high-profit market shipments; in 2023, the company's gross profit margin in the US market was 34.24%, which is significantly higher than other regions. Currently, the company has an integrated production capacity capacity in Southeast Asia of 6.5 GW, and is expected to maintain the leading profitability industry with high-profit market shipments in 2024.
Deploy distributed systems, brackets, and energy storage to provide integrated smart energy solutions for optical storage to achieve differentiated competition. The company is committed to building an overall solution provider for photovoltaic smart energy. In 2023, the distributed system business achieved a 78% increase in grid-connected capacity, and maintained a high level of profitability; the bracket business achieved 9.6 GW of shipments (including 4.6 GW of tracking brackets), while setting up an intelligent tracking manufacturing plant in Brazil to accelerate the expansion of the global market; sales of energy storage modules and systems broke through the six major regional markets of China, Europe, Asia Pacific, North America, Middle East Africa, and Latin America. The production capacity of energy storage batteries, DC battery compartments and AC/DC product portfolios reached 12 GWh in 2024 System shipments are expected to accelerate significantly.
Credit and asset impairment of $3.74 billion to ensure healthy and stable asset quality and profitability. Q4 The company accrued credit/asset impairment of $1.71/1.43 billion, of which fixed assets depreciated $376 million. Under sharp fluctuations in raw material prices and changes in battery technology, the company accrued bad debts and asset losses based on prudential principles, which is expected to ensure that the quality of equipment assets and future profitability remain at a good level.
Profit Forecasts, Valuations, and Ratings
According to our latest judgment on product prices, the company's 2024-2025 net profit forecast was lowered to 41.6 (-50%) and 59.9 (-42%) billion yuan, and the 2026 forecast was added to 8.13 billion yuan. The current stock price corresponds to PE 10/7/5 times, maintaining the “buy” rating.
Risk warning
Increased competition risks; downstream demand falling short of expectations; risk of large exchange rate fluctuations.