Event: The company released its 2024 quarterly report. 24Q1 achieved revenue of 5.321 billion yuan, +8.32% year over month, -10.40% month on month, and realized net profit of 522 million yuan to mother, +43.13% year on year and +24.40% month on month. The performance was in line with expectations.
24Q1's adhesive film product shipments exceeded expectations, and the proportion of new products suitable for LECO and 0BB is expected to increase. As of 24Q1, the company's adhesive film product shipments reached more than 600 million square meters, exceeding market expectations. Backplane products are shipped approximately 34 million square meters. Among them, as of 24Q1, the company's adhesive film product market share reached more than 50%. In terms of profitability, the company's 24Q1 due to a decline in the price of photovoltaic film products, but the company has a clear advantage in terms of cost and scale, with a gross margin of 15.28%, +2.99pct year over year, and -0.97pct month-on-month. From a new product perspective, the share of TopCon and HJT components is expected to increase, and there is a new demand for auxiliary film. The company 24Q1 began to gradually promote acid-free EVA film suitable for TopCon LECO technology and skin film suitable for 0BB welding tape technology. We expect the share of new film products from companies promoting N-type batteries will increase in the future.
24Q1 The company's new electronic materials layout accelerated. As of 2023, the company shipped 115 million square meters of photosensitive dry film, +4.52% year-on-year, and shipped 1.06 million square meters of aluminum-plastic film, +67.85% year-on-year. In terms of products going overseas, the company plans to invest in the establishment of Thailand's Foster Electronic Materials Co., Ltd. in Thailand, with a total investment of 5 million US dollars to accelerate the construction of overseas electronic materials production capacity. In the future, the company will further promote the formation of customer synergy between photosensitive dry film, photosensitive coating film, and FCCL products, and strive to become the world's leading supplier of electronic materials within 3 to 5 years. As of 24Q1, the shipment volume of photosensitive dry film reached 32 million square meters, an increase of more than 30% over the previous year, and a gross margin of more than 20%.
Investment advice: The estimated net profit for 24-26 will be 25.95/31.25/37.63 billion yuan, YoY +40.2%/+20.4%/+20.4%, and EPS 1.39/1.68/2.02 yuan, respectively. Maintain a “buy” rating.
Risk warning: PV demand is less than expected, raw material prices fluctuate, and market competition intensifies