Event: The company achieved operating income of 6.39 billion yuan in 2023, an increase of 72.59% over the previous year; realized net profit of 345 million yuan, an increase of 676.58% over the previous year. 2024Q1 achieved operating income of 1,814 billion yuan, an increase of 122.47% year on year, and realized net profit of 154 million yuan, an increase of 297.18% year on year.

Benefiting from sales in overseas markets such as the Middle East, Latin America, and India, the stent business increased dramatically in shipments and revenue. The company relied on early vertical and horizontal integration strategies for photovoltaic stents, planned a global marketing network system, built a global supply chain, and developed innovative products and components to bring cost reduction and efficiency capabilities, etc., to seize industry opportunities, and achieved rapid growth in the bracket business in overseas regions such as the Middle East, Latin America, India, etc., and achieved a significant increase in the revenue scale of the photovoltaic bracket business. In 2023, the company's PV bracket business revenue was 5.660 billion yuan, up 74.83% year on year. Among them, fixed bracket revenue was 2,062 billion yuan, up 26.34% year on year; fixed bracket sales volume was 9.40 GW, up 30.06% year on year. Tracking bracket revenue was 3,598 billion yuan, up 124.13% year on year; tracking bracket sales volume was 7.64 GW, up 129.47% year on year. In 2024Q1, the company's total bracket sales volume was 4.68 GW, an increase of 91.84% over the previous year. Among them, the tracking bracket sold about 3.82 GW, and the fixed bracket sold about 0.86 GW.

Sales of 2024Q1 brackets are mainly overseas. The total amount of PV brackets shipped overseas is about 3.6 GW, and the total number of PV brackets delivered domestically is about 1 GW.

The share of tracking bracket sales increased, vertical integration reduced costs, and gross margin increased dramatically. With the development and innovation of the company's photovoltaic stent system products and components, the gross margin of the company's photovoltaic stent system has steadily increased due to the continuous promotion of cost reduction and efficiency methods such as increasing production capacity contribution effects in the early global supply chain layout, optimizing procurement models, and expanding procurement channels. At the same time, as orders for major overseas projects are delivered one after another, the share of sales of tracking bracket system products has increased steadily, compounded by the effects of stabilizing raw material prices and exchange rate fluctuations. In 2023, the gross profit margin of fixed brackets was 16.94%, up 5.55pp year on year; gross profit margin of tracking brackets was 19.96%, up 6.19pp year on year. As the share of tracking brackets increased in 2024Q1, the company achieved a comprehensive gross profit margin of 20.79%, an increase of 0.90pp over the previous month.

After two consecutive quarters of record deliveries, there are still plenty of on-hand orders. As of the end of 2024Q1, the company's total orders were about 6.8 billion yuan, including about 5.9 billion yuan for tracking brackets, 800 million yuan for fixed brackets, and about 100 million yuan for other businesses. After two consecutive quarters of revenue in 2023Q4 and 2024Q1, the company's on-hand orders are still full, ensuring high revenue growth throughout the year. As the company's revenue volume increased, the model effect gradually became apparent, and the cost ratio dropped sharply during the period. The company's expense rates for 2023 and 2024Q1 were 8.99% and 9.57%, respectively, down 1.27pp and 1.45pp from the same period last year. In addition, the company's asset impairment was fully accrued, and various types of impairment (credit impairment loss, asset impairment loss) were calculated in 2023 and 2024Q1, respectively, at 169 million yuan and 37 million yuan.

Profit forecasting and investment advice. We estimate that the company's net profit for 24-26 will be 701, 8.84, and 1.08 billion yuan, respectively, and the corresponding PE will be 20, 16, and 13 times, respectively. As a leader in overseas tracking, the company has benefited from the explosion of demand in the Middle East, Latin America, India and other regions; the company's overseas supply chain advantages are obvious, and the overseas market share is expected to increase steadily along with Chinese-owned EPCs. The company was given 25 times PE in 24 years, corresponding to a target price of 129 yuan, maintaining a “buy” rating.

Risk warning: Overseas market expansion risk, price fluctuation risk of major raw materials such as steel, risk of exchange rate changes.