CITIC released its 2023 Annual Report and 2024 Quarterly Report. In 2023, the company achieved total revenue of 6.39 billion yuan, +72.59% year on year; realized net profit to mother of 345 million yuan, +676.58% year on year; gross sales margin of 18.11%, +5.67pct year on year, net sales margin of 5.41%, +4.18 pct year on year. Among them, 23Q4 achieved revenue of 2,997 billion yuan, +107.58%/+103.63% YoY; realized net profit of 188 million yuan, +229.31%/216.41% YoY. 24Q1 achieved revenue of 1,814 billion yuan, +122.47%/-39.47% YoY; realized net profit to mother of 154 million yuan, +297.18%/-17.94% YoY.

Tracking bracket shipments exceeded expectations, and lower costs led to an increase in gross margin. In 2023, the company's bracket business module achieved revenue of 5.66 billion yuan, of which fixed bracket revenue was 2,062 billion yuan, +26.34% year over year; tracking bracket revenue was 3,598 billion yuan, +124.13% year over year. The company shipped 9.4 GW of fixed brackets and 7.6 GW of tracking brackets in 23 years. Judging from the unit price, the sales unit price of the tracking bracket was 0.47 yuan/W, -2.33% compared to the same period, the unit cost was 0.38 yuan/W, -9.34% year over year, the unit price of the fixed bracket was 0.22 yuan/W, the unit cost was 0.18 yuan/W, -8.94% year over year, and gross margin increased.

Q1 Orders are growing rapidly, and the share of tracking brackets has increased. As of March 31, 2024, the company's current orders totaled about RMB 6.8 billion, including about RMB 5.9 billion for tracking brackets, RMB 800 million for fixing brackets, and about RMB 100 million for other businesses. As of December 31, 2023, the company's current orders totaled about 4.7 billion yuan, including about 3.6 billion yuan for tracking bracket systems, 1 billion yuan for fixed bracket systems, and about 100 million yuan for others.

Q1 orders increased by 2.1 billion yuan, including tracking bracket orders increased by 2.3 billion yuan, fixed brackets decreased by 200 million yuan, and the share of tracking brackets further increased, driving the company's gross margin increase. The company's annual shipments are expected to exceed 13 GW, leading to a significant increase in revenue and profit.

Investment advice: The company is expected to achieve net profit of 719/9.73/1,167 billion yuan in 24-26, +108.4%/35.3%/19.9% year-on-year, and EPS of 5.30/7.16/8.59 yuan respectively, maintaining a “buy” rating.

Risk warning: Company market share reduces risk, trade policy protects risk