Event: The company released its 2024 quarterly report. 2024Q1 achieved revenue of 10.975 billion yuan, +4.74%/-18.96% month-on-month, realized net profit of 319 million yuan, reversed losses year-on-year, +16.93% month-on-month, and realized net profit without return to mother of 279 million yuan, reversing losses year-on-year, and -23.21% month-on-month. 2024Q1 gross sales margin was 16.52%, +2.84/+1.50pct; net sales margin 0.20%, +3.70/-0.43pct month-on-month. The results are in line with market expectations.
Q1 Power business shipments doubled year-on-year by 4 GWh, and gross margin continued to increase by about 12%. We estimate that the company's 2024Q1 power battery shipment volume (including 0.5 GWh of energy storage) reached 4 GWh, doubling the year-on-year increase, with a gross profit margin of 12% and +2 pct month-on-month. Profitability was further restored. The increase in the company's power battery profit was mainly affected by factors such as the smooth climb in production capacity and the better gross margin of new projects. We expect the company's power unit price to be about 0.61 yuan/Wh (excluding tax), and the unit loss is about 0.1 yuan/Wh. Currently, the company's monthly shipment volume has reached more than 2 GWh, and the annual shipment volume is expected to reach 25-30 GWh, which has more than doubled over the previous year. Benefiting from the continued growth of major customers such as Ideal, Dongfeng, Geely, etc., the company's power business is expected to continue to reduce losses.
Lithium-ion helps consumer business profits increase rapidly, and equity incentives show confidence in long-term development. The company's 2024Q1 consumer battery business revenue was 6.5 billion yuan, the same as the previous year, with a gross profit margin of 16% and +3pct year over year. The 24Q1 mobile phone PACK battery self-supply rate reached 35%, an increase of 5 pct over the whole year, and the laptop PACK battery self-supply rate reached 20%, an increase of 10 pct compared to 23 for the whole year. The company issued an equity incentive plan for a total of 730 people, including company directors, senior management and key technical (business) personnel. The number of restricted shares granted this time is 1.46 million, and the grant price is 690 yuan/share. The assessment targets are no less than 55 billion yuan in revenue for 2024 and no less than 118 billion yuan for the cumulative revenue for 2024-2025, corresponding to an annual revenue growth rate of 15% in 24-25.
Investment advice: The company's consumer business is growing steadily, and power storage continues to grow. We expect the company to achieve net profit of 14.07/18.24/2.042 billion yuan in 2024-2026, +30.8%/+29.6%/+12.0% year-on-year, corresponding EPS of 0.76/0.98/1.10 yuan, maintaining a “buy” rating.
Risk warning: consumer demand falls short of expectations; power shipments fall short of expectations; industry competition intensifies.