Incident: The company's revenue in 2023 was 113.392 billion yuan, up 33.32%; net profit to mother was 5.531 billion yuan, up 50.26%, after deducting non-net profit of 5.755 billion yuan, up 66.02%; Q4 net profit to mother was 454 million yuan, down 64.45%, 70.45%, net profit of 635 million yuan, down 48.13% and 54.88%. The performance was in line with expectations. 24Q1 revenue was 18.256 billion yuan, down 14.37% and 43.43%; net profit to mother was 516 million yuan, down 70.83%, up 13.59%, after deducting non-net profit of 447 million yuan, down 74.15%, or 29.62%. The results slightly exceeded expectations.
Shipments continued to grow, and competition intensified the decline in profits. In 2023, module shipments were 65.2 GW, an increase of 51%. Of these, export sales were about 54.5 GW, power plant and system product usage was about 10.7 GW; Q4 shipments were about 20 GW (confirmed receipt of about 18 GW), an increase of 54%/23%; it is estimated that net profit per watt decreased month-on-month. The 24Q1 module was shipped 14GW+, and the revenue was confirmed to be about 12GW+. The decline in profit per watt was estimated as the module price declined. We expect the company to ship 80-90GW of components in '24, and China is expecting 40% +, Europe over 20%, and North America 10%; as the production capacity of the industry under price pressure gradually shrinks, we expect the price of the 24H2 industry may return.
Distributed development gains profits, and multiple businesses support growth. The company distributed shipments in 2023 were about 9.6 GW, an increase of 54.8%; 2024Q1 shipped 1.7 GW, and confirmed receipt of about 1 GW. Profits remained stable due to reduced component prices and market channel expansion; we expect shipments to increase 20% in 2024.
The bracket was shipped 9.6 GW in 2023, and the profit per watt was about 1 percent; the 2024Q1 shipped 1.8 GW, maintaining profit, and we expect a 50% increase in 2024. Energy storage shipped about 2 GWh in 2023 and 400-500 MWH in 2024Q1. Investment continued to be maintained, and there was a slight loss on the profit side. Shipments are expected to be 5GWH+ in 2024, and the target is the top three in the world in 2028. Optical storage collaboration, diversification and high growth in business.
Production capacity is moderately expanded, and technology continues to be upgraded. The company's silicon wafer/battery/module production capacity will reach 55/75/95GW by the end of 2023, including N-type 40GW+; we expect to reach 60/105/120GW by the end of 2024.
In terms of overseas production capacity, the company plans to have an integrated production capacity of 6.5 GW in Southeast Asia plus 5 GW components in the US. Production capacity is expected to begin production in October; production capacity will expand moderately and gradually settle overseas. The technology continues to be upgraded. The company's 210-TPC module has a maximum power of 740.6 W, the mass production size efficiency of HJT batteries has reached 26.21%, and the efficiency of perovskite crystal silicon laminated batteries (16cm2) has reached 25.53%, and the technology continues to be upgraded.
There is sufficient cash on hand, and inventory has increased slightly. The company's monetary capital at the end of 2024Q1 was 23.8 billion yuan, a drop of about 600 million yuan; the overall cash on hand was sufficient. Inventory was about 29.9 billion yuan, an increase of about 6.5 billion yuan over the previous month, and the inventory level increased; operating cash outflow was about 4.4 billion yuan, mainly due to procurement and stocking in preparation for subsequent shipments in 2024Q1, which led to a net cash outflow and an increase in overall inventory levels.
Profit forecast: Based on the intensification of industry competition, the rapid decline in prices, and the reduction in profit forecasts, we expect the company's net profit to be 40/57/7.1 billion yuan in 2024-2026 (2024-2025 was originally expected to be 57/70 billion yuan, an increase in 2026), -27%/+42%/+24% over the same period last year, corresponding to 11x/8x/6xPE to maintain a “buy” rating.
Risk warning: increased competition, policies falling short of expectations, etc.