Key points of investment
Incident: The company released the 2023 annual report and the 2024 quarterly report. In 2023, the company achieved revenue of 2,026 million yuan, net profit of 512 million yuan, -4% year-on-year, net profit after deducting 527 million yuan, up 2% of which 2023Q4 achieved revenue of 618 million yuan, +3%/80% year-on-year, net profit attributable to mother of 96 million yuan, 43%/+44% year-on-month, net profit of non-return mother of 146 million yuan, -12%/+201% year-on-month; 2024Q1 Revenue of 331 million yuan, -43%/-46% YoY, net profit attributable to mother was 67 million yuan, -62%/-30% YoY, net non-return net profit of 66 million yuan, -62%/-55% YoY. The results fell slightly short of expectations.
2024Q1 slightly reverse the increase in shipments, and is expected to increase quarterly in the future. The company achieved micro-reverse shipments of 1,318,800 units in 2023, up about 13%. By market, Europe accounts for about 60%, North America 10% +, and Asia Pacific about 10%; of these, 2023Q4 shipments are about 210,000 units, a slight decrease from month to month; 2024Q1 shipments are about 230,000 units, a decrease of about 60%, an increase of about 10%. Demand in the European and Latin American markets is expected to gradually increase. At the same time, the company is expected to launch 1-2 major new products to enhance the competitiveness of the company in the second half of the year. At the same time, the US channel is also gradually breaking through. It has now entered the Sunnova channel. We expect to slightly reverse ship 1.5 to 1.7 million units throughout the year, an increase of 20% +.
Energy storage is being released at an accelerated pace and is expected to double in 2024. The company achieved energy storage system revenue of about 310 million yuan in 2023, an increase of 354%. Among them, we expect to achieve revenue of about 180 million yuan in 2023Q4; 2024Q1 will achieve revenue of about 40 million yuan. The company also gradually increased investment in medium- and high-power energy storage research and development. Energy storage began to grow in volume in 2024, and is expected to double throughout the year.
The power generation system business grew rapidly, and the complete electrical equipment business was gradually divested. The company's power generation system business achieved revenue of about 160 million yuan in 2023, an increase of 302%. The gradual development scale led to a high increase in revenue, and is expected to continue to increase in 2024; the complete electrical equipment business achieved revenue of 93 million yuan in 2023, or -43% over the same period last year. At the same time, the company has already divested the complete electrical business through disposal of subsidiaries.
Profit forecast and investment rating: Considering the slight slowdown in the negative growth rate, we lowered our 2024-2025 profit forecast and added the 2026 profit forecast. We expect the company's net profit to be 6.8/10.0/1.39 billion yuan in 2024-2026 (the value before 2024-2025 was 8.3/1.35 billion yuan), an increase of 32%/48%/39%. The corresponding PE is 27/18/13 times, maintaining the “buy” rating.
Risk warning: Increased competition and policies falling short of expectations.