The company released its 2024 quarterly report. In the first quarter of 2024, the company's revenue increased 6.73% year on year to 5.726 billion yuan, net profit to mother increased 48.57% year on year to 760 million yuan, and net profit after deducting non-return to mother increased 51.89% year on year to 760 million yuan. The company has a strong competitive advantage. Production capacity is expected to expand to 32,200 tons/day by the end of 2024, and its position in the industry is expected to be consolidated. Furthermore, the impact of the April PV glass price increase is expected to be felt in subsequent quarters, and the company's profit level is also expected to increase.
A brief analysis of the 2024 Quarterly Report. The company released its 2024 quarterly report. In the first quarter of 2024, the company's revenue increased 6.73% year on year to 5.726 billion yuan, net profit to mother increased 48.57% year on year to 760 million yuan, and net profit after deducting non-return to mother increased 51.89% year on year to 760 million yuan. The company's consolidated gross margin for the first quarter of 2024 was 21.47%, up 3 percentage points year on year and down 1.96 percentage points from month to month.
Split of results for the first quarter of 2024. It is estimated that in the first quarter of 2024, the company's sales volume of photovoltaic glass was about 310 million square meters (all converted to 2.0mm specifications), with a month-on-month increase of less than 10%. The revenue for a single flat panel was 17-17.5 yuan, a decrease from month to month. The estimated net profit for a single flat panel of photovoltaic glass was about 2.3-2.5 yuan. In terms of cost, the company's Q1 bill declined in Heisei due to raw material prices. Among them, the average price of Q1 soda ash decreased by 479 yuan compared to 23Q4. Assuming that the inventory was about 10 days during the decline in soda ash prices, the impact of the drop in soda ash prices on the cost is estimated to be about 0.4 yuan/square meter. In addition, the total sales, management, and financial expenses of the Q1 company fell by about 180 million yuan, corresponding to a decrease of about 0.58 yuan/square meter in a single flat fee. Looking ahead to the second quarter, the impact of the April glass price increase is expected to be felt in subsequent quarters, and the company's profit level is also expected to increase.
Further expand production capacity with competitive advantages. As of the first quarter of 2024, the company's glass melting volume was 21,800 tons/day, up 0.12 million tons/day from the end of 2023, mainly due to the ignition and commissioning of the first kiln in the fourth phase of Anhui. It is expected that the other three kilns in the fourth phase of Anhui will be put into operation in June-July. In addition, the company's Nantong project (4*1200 t/d) is expected to be launched in Q2-Q3, and production capacity will reach 302,000 tons/day by the end of 2024.
The company plans to invest in the construction of photovoltaic glass kilns in Indonesia to meet the demand for photovoltaic glass in different countries and regions. The company has strong competitiveness, expanded production with cost advantages, and is expected to further strengthen its position in the industry.
Investment advice: The estimated net profit for 2024 and 2025 will be 38.63 billion yuan or 4.880 billion yuan, corresponding to the valuation 16 times and 13 times, maintaining the “Highly Recommended” rating.
Risk warning: Global PV installations fall short of expectations, oversupply, etc.