Performance summary: The company released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved revenue of 1.61 billion yuan, +21.5% year on year; net profit to mother of 460 million yuan, +12.2% year on year; deducted non-net profit of 430 million yuan, +10.3% year on year. In the first quarter of '24, the company achieved revenue of 450 million yuan, +29.6% year on year; net profit to mother of 140 million yuan, +44.5% year on year; deducted non-net profit of 130 million yuan, +40.9% year over year.
New technology equipment for N-type batteries has been received, unit equipment prices have increased, and profitability has remained stable. In 2023, the company's photovoltaic cell laser processing equipment revenue was 1.37 billion yuan, up 17% year on year; sales volume was 645 units, with a sales unit price of 2.12 million yuan, up 22.3% year on year, mainly for N-type battery equipment with higher unit value, such as TopCon SE, XBC battery laser microetching and metallization equipment, which gradually increased the average sales price.
On the other hand, new battery technology is more valuable and relatively more profitable; although the price of TopCon SE equipment fell in 23, the company also continued to reduce costs through product optimization and upgrading, so high profits continued to be high and stable.
The gross profit margin of the company's photovoltaic laser equipment in '23 was 45.7%, an increase of 1.4pp over the previous year; the net profit margin for the whole year was 28.7%.
24Q1 The company's gross profit margin was 48.7%, and the net profit margin was 30.0%.
New technologies such as TopCon+ have been developed, TGV laser microporous technology has been demonstrated in small batches, and new technologies and new application fields are worth looking forward to. In 23, the company completed the delivery of TopCon SE and LIF equipment, and continued to develop laser selective doping, backside laser selective thinning, and double-sided poly laser process technology for TopCon batteries, which can further improve TopCon's conversion efficiency and reduce TopCon costs. In other application areas, the company has developed TGV laser micropore technology, which can realize multi-form processes such as round holes, square holes, and microslots on glass substrates of different materials. It can be used in semiconductor chip packaging, display chip packaging and other industries, further broadening the company's business areas
R&D expenses continue to rise, and orders for new battery technology and laser equipment are growing full of momentum. As a supplier of photovoltaic cell equipment, we need to continue to develop equipment products that reduce costs and increase efficiency for downstream customers. In '23, the company's R&D expenses were 250 million yuan, an increase of 92% over the previous year, and the R&D expenditure rate increased by 5.7pp to 15.6%, making it the largest growth project for the period cost & period cost ratio; the number of R&D personnel increased 76% to 525 people over the same period. 24Q1 continues to invest heavily in R&D, with R&D expenses of 90 million and a R&D cost ratio of 15.5%. High R&D investment has provided growth momentum for the company's new technology equipment products.
Profit forecast and investment suggestions: As a leader in photovoltaic laser equipment, the company is in the special equipment industry, and the gross margin and net margin are higher than those of its peers; moreover, after N-type battery technology is iterated, the requirements for laser equipment are higher, and the company's technical barrier advantages are becoming more prominent. We expect the compound growth rate of net profit to be 24.7% over the next three years, giving 2024 24 times PE and a target price of 53.8 yuan, maintaining a “buy” rating.
Risk warning: risk of global PV installations falling short of expectations; risk of rising raw material prices and declining company profitability; risk of exchange rate fluctuations; risk of policy changes such as overseas tariffs.