Profits declined due to overseas inventory removal
In '23, the company achieved revenue of 6.101 billion yuan (+3.59% yoy), net profit to mother of 779 million yuan (-26.46% yoy), and deducted non-net profit of 786 million yuan (-24.60% yoy). In Q1 '24, we achieved revenue of 1,397 million yuan (-15.56% yoy, -4.29% qoq), net profit to mother of 20 million yuan (-93.74% yoy, -27.16% qoq), after deducting non-net profit of 14 million yuan (-95.64% yoy, -0.98% qoq). Considering that the pace of inventory removal fell short of our previous expectations, we lowered our 24-25 net profit forecast to 880.1.05 billion yuan (previous value 24.64/32.67), and added a 26-year forecast of $1,323 million.
Comparatively, the company Wind unanimously expected an average PE value of 17.5 times. Considering that the company is actively exploring emerging markets, the impact of inventory is expected to weaken quarterly. The company will be given 25.5 times PE in 24, with a target price of 56.61 yuan (previous value of 83.2 yuan), maintaining the “gain” rating.
Inventory removal dragged down performance, and export sales revenue declined
The company achieved revenue of 6.101 billion yuan, +3.59% year over year; realized net profit of 779 million yuan, -26.46% year over year; mainly due to the decline in new demand from overseas customers due to inventory removal, export sales revenue declined. The company's gross and net profit margins for fiscal year 23 were 33.52%/18.00% respectively, a year-on-year change of -1.14/-5.22pct. The main reason was that the company cut prices for domestic products by a certain margin in order to maintain a competitive position in the market, which led to a decline in domestic sales gross margin. The company's 23-year sales/management/R&D/finance expense ratio was 6.00%/4.54%/5.12%/2.55%. The year-on-year change was +1.70/+1.45/+0.01/+1.93pct, and the total rate increased by 5.09pct year-on-year.
Open up overseas markets, and 24-year results are expected to recover quarterly
In '23, the company's grid-connected inverter sales revenue was 4,064 billion yuan, +1.53% year-on-year, with a gross profit margin of 21.63%, year-on-year -5.80pct; sales revenue of energy storage inverters was 439 million yuan, -58.91% year-on-year, with a gross profit margin of 37.08%, and +2.75% year-on-year. A total of 746,700 inverters were shipped in '23, a year-on-year decrease of 20.76%.
The company's overall revenue in overseas regions reached 2,411 billion yuan in '23, -25.93%. Along with the advancement of the overseas warehousing process, the company actively lays out global markets such as the United Kingdom, the Netherlands, Australia, Mexico, India, and the United States. The company's performance is expected to recover quarterly within 24 years.
Household photovoltaic business revenue scale increased
The company's household photovoltaic power generation system business in '23 achieved revenue of 1,194 billion yuan, +106.19% year over year, gross profit margin of 59.90%, -5.57 pct year on year. We believe this is mainly due to the introduction of affordable power plants. The company is currently developing and constructing several power plant projects. By the end of 2023, the company's distributed photovoltaic power plants had a cumulative installed capacity of 1186.71 MW. Through risk control and professional management of all aspects of the business, Jinlang Smart already has mature one-stop solution capabilities for the new energy power production business.
Risk warning: The development of the industry fell short of expectations, market competition intensified, and the increase in upstream raw materials exceeded expectations.