The company announced that it achieved revenue, net profit, and net profit of 34.43 billion yuan, 2.17 billion yuan, and 237 million yuan, an increase of 140.2%, 123.3%, and 165.2% over the previous year. Among them, Q4 revenue for a single quarter, net profit, and net profit of 12.56, 0.50, and 77 million yuan, increased 221.4%, 29.9%, and 105.5% year-on-year. Revenue was achieved in the first quarter of '24, including net profit and deducting non-net profit of 8.60, 0.79, and 73 billion yuan, an increase of 49.5%, 122.5%, and 109.0% year-on-year
The performance was in line with expectations. The company's revenue and profit in 2023 was mainly a contribution from the environmental protection equipment business, which completed sales of 3.4 billion yuan, a significant increase of 141.8% over the previous year. During the reporting period, management expenses increased 143% year-on-year due to the company's new business development, incentives, etc., but the expansion of operating scale still led to a decrease of 2.2 pcts in the overall cost ratio. During the business expansion period, the company increased capital expenses, etc., and the company's debt ratio at the end of the period was 76%, which is a certain increase compared to the beginning of the period. The environmental protection equipment business continued to maintain a high growth trend in the first quarter. Due to changes in the product delivery structure, Q1 profit performance was better, and the net interest rate reached 9.2%.
The battery business received orders from major customers, and new growth poles are gradually becoming clear. The company's Xuancheng 9GW TopCon battery was put into operation in December last year, gradually starting large-scale overseas delivery. The company's production line is equipped with new technologies such as SE and laser-induced sintering. The product parameters are compared to advanced peers, which is expected to form strong competitiveness.
In addition, the company's own supply of environmental protection supporting equipment has a certain cost advantage, which may be reflected in future profit levels. In March of this year, the company revealed that it had signed an order with Jinko for 2.5 billion TopCon batteries (estimated at over 20 GW at 182N). The shipment volume and performance contribution of Q2 cells is expected to be reflected.
The company's environmental protection business has received new orders and is in a period of rapid development. The company is a leading supplier of environmental protection equipment for pure water treatment of waste gas and wastewater. The downstream covers industrial customers such as photovoltaics, TMT, smelting, etc., and accounts for nearly 50% of the PV battery equipment market. The company has benefited from this round of N-type technological transformation. Since this year, the company has continuously won joint bids for industrial base park construction projects in Chongqing and Ningguo, and the equipment business is more certain.
Investment advice: The company's traditional business has a certain margin of safety and is currently in a period of high growth; TopCon Battery has become its new growth pole, and its growth contribution will continue to increase. Furthermore, the company has explored a profitable carbon sequestration business model that does not rely on subsidies, and is expected to make new contributions in the future. It is predicted that the company will achieve net profit of 650 million in 2024, maintaining a highly recommended rating.
Risk warning: The commissioning and operation of the company's cells fell short of expectations, downstream demand for photovoltaics was weak, and the operating rate of the carbon sequestration business was lower than expected.