Event: The company publishes the “2024 First Quarter Report”. In Q1 2024, the company achieved revenue of 23.08 billion yuan, -0.3% year on year; realized net profit of 1.18 billion yuan, -29.1% year over year; realized net profit without deduction of 190 million yuan, -84.3% year on year. The continued decline in component prices led to a narrowing of the company's profits, and integrated manufacturers ushered in a lower performance range. The advantages of an efficient N-type production capacity structure ensure that the company still has strong profitability at the bottom of the price.
High-volume component shipments are maintained, and N-type advanced integrated production capacity creates an advantage barrier. The company exceeded its component shipment target in 2023. According to Infolink data, Jinko achieved the leading component shipment industry throughout the year. By the end of 2023, the company's production capacity of monocrystalline silicon wafers, batteries and modules will reach 85GW, 90GW and 110GW respectively. Of these, N-type production capacity will account for more than 75%, leading the industry in N-type production capacity. By region, the company's shipments grew more evenly in each region, and shipments were mainly concentrated in the Chinese, European and Asia-Pacific markets. At the same time, emerging markets represented by Latin America and the Middle East continue to gain strength, and the North American market continues to improve. After entering 2024, the photovoltaic industry generally entered the bottom of the performance range. The company further improved the integrated layout to reduce manufacturing costs, and is expected to remain profitable when module prices bottom out.
High-efficiency TopCon battery mass production efficiency is expected to be 27% +, and advanced production capacity guarantees profit margins. On October 31, 2023, the conversion efficiency of the company's 182N high-efficiency monocrystalline silicon battery (TopCon) was tested and certified by a third party by the National Photovoltaic Industry Measurement and Testing Center, and the overall battery conversion efficiency reached 26.89%. The company's vigorous TopCon technology route currently dominates the industry. It is expected that around 2025, through production optimization, material optimization, simultaneous next-generation technology reserves and new technology upgrades, the mass production conversion efficiency of N-type TopCon batteries will reach 27%-27.5%, further reducing the electricity cost of photovoltaic power generation through improved efficiency. Currently, the main contradiction in the photovoltaic industry chain is still supply and demand. While N-type TopCon is gradually being implemented as an advanced production capacity, it is also simultaneously breaking through iteration itself through continuous efficiency, forming an internal iteration of advanced and efficient TopCon batteries versus inefficient TopCon batteries. Therefore, we continue to be optimistic about the company's R&D progress on high-efficiency TopCon batteries.
Priority is given to high-premium markets, and overseas layouts obtain excess profits. Currently, for integrated component manufacturers, the “N-type structure” and “overseas share” are the keys to maintaining competitiveness in production capacity. Jingke Energy continues to expand advanced production capacity and overseas layout. It has an industry-leading 12GW overseas integrated production capacity and raw material supply system. Currently, supply to the US market is relatively stable. The US market's order price has a clear advantage over other regional markets. Currently, the company's order price in the US is relatively stable, order visibility is high, and it is expected to obtain excess revenue through continuous layout of high-premium overseas markets.
Profit forecasting and investment advice. Affected by the continued decline in component prices and the industry's delayed revenue recognition, we lowered the company's profit forecast for 2024-2026 and determined that the company's profit within three years was 76.34/99.15/10.991 billion yuan, corresponding PE was 9.9x/7.6x/6.9x, maintaining the “gain” rating.
Risk warning: Demand for new PV installations is insufficient, and the price trend in the industrial chain falls short of expectations.