The company's operating conditions in 2023 and the first quarter of 2024: According to the company's 2023 report, the company achieved operating income of 6.39 billion yuan in 2023, an increase of 72.6% over the previous year; realized net profit of 345 million yuan, an increase of 676.58% over the previous year. Among them, 2023Q4 achieved revenue of 2,997 billion yuan, an increase of 107.6% over the previous year, and realized net profit of 188 million yuan, an increase of 229.3% over the previous year. According to the company's report for the first quarter of 2024, the company achieved revenue of 1,814 billion yuan in the first quarter of 2024, an increase of 122.5% over the previous year; realized net profit of 154 million yuan, an increase of 297.2% over the previous year, and achieved outstanding results.
Shipments of tracking brackets have increased dramatically, and orders are strong, driving both volume and profit increases. According to the company's 2022 and 2023 annual reports, the company's tracking bracket sales volume in 2023 was 7.64 GW, up 129.5% year on year, and the share of total bracket products increased to 44.8%, a significant increase compared to 31.5% in '22; the company's overall gross margin in 2023 reached 18.1% (+5.7pct year on year), of which the gross margin of tracking bracket products reached 20.0% (+6.2 pct year on year), which was higher than 16.9% (+5.6 pct) of fixed brackets. According to the company's report for the first quarter of 2024, as of March 31, 2024, the company had total orders of about 6.8 billion yuan, of which the tracking stand was about 5.9 billion yuan and the fixed bracket was about 800 million yuan. We believe that the market demand for tracking stents is being released at an accelerated pace, and that the release of the company's tracking bracket products will continue to protect the company's profitability.
The diversification of the global PV installation market is accelerating, and the Belt and Road countries have great potential. According to the CPIA official account, the GW market for PV installations reached 32 countries in 2023, with new markets including Belt and Road countries such as the United Arab Emirates, Saudi Arabia, and Uzbekistan, and is expected to reach 39/53 in 24/25.
According to an article published on the company's official account, the company has been located in the Middle East for many years, and cooperation projects have spread across the UAE and other countries. We believe there is still great potential for growth in the future as the company further develops its global layout.
Technology drives innovation, and the company's comprehensive advantages are remarkable. According to the company's 2023 annual report, the company's core competitive advantages include: 1) technological innovation, the company has a wind tunnel laboratory and numerical wind tunnel calculation center, and actively uses artificial intelligence control and other technology to enable more efficient products; 2) vertical integration strategy, the company has high-quality production capacity support or partners in support structure systems, control systems, etc.; 3) the marketing network is globally based, and the company has accumulated rich experience in international projects and the ability to explore more markets.
We believe that the company's multi-dimensional layout has brought a clear competitive advantage, which has gradually been reflected in its performance.
Profit forecast and rating: We expect the company's net profit to be 7.27, 8.82, and 1,040 billion yuan respectively for 24-26, up 110.7%, 21.3%, and 18.0% year-on-year. As a leader in photovoltaic stents, the company's products are exported worldwide, and profitability has improved markedly. Refer to comparable companies that gave the company a PE valuation of 20-22 times in 2024, corresponding to a reasonable value range of 107.00-117.70 yuan, giving it a “superior to the market” rating.
Risk warning: Risk of new PV installations falling short of expectations; risk of industry and market competition.