Core views
In 2023, the company achieved net profit of 1,634 billion yuan, a year-on-year increase of 56.0%; 24Q1 achieved net profit to mother of 578 million yuan, an increase of 71.9% over the previous year. By business, the company maintains a leading position in technology in photovoltaic cell equipment, sales orders for semiconductor equipment continue to grow, and at the same time actively expand special equipment for lithium batteries and lithium batteries. As the company's TopCon equipment order delivery scale continues to expand, it is recommended to focus on the increase in orders brought about by the application of TopCon's new technology. In addition, the company continues to receive orders for HJT, perovskite, etc., bringing new order growth points to the company.
occurrences
Company Announces 2023 Annual Report & 2024 Quarterly Report
In 2023, the company achieved operating income of 8.733 billion yuan, a year-on-year increase of 45.3%, achieved net profit of 1,634 billion yuan, an increase of 56.0% over the previous year, and realized net profit without deduction of 1,525 billion yuan, an increase of 57.0% over the previous year. In the first quarter of 2024, the company achieved operating income of 2,579 billion yuan, a year-on-year increase of 33.5%, and realized net profit of 578 million yuan, an increase of 71.9% over the previous year, and realized net profit without deduction of 551 million yuan, an increase of 85.5% over the previous year.
Brief review
The performance was outstanding, and the 23Q4 and 24Q1 results achieved year-on-year growth. Thanks to N-type batteries accelerated iteration of P-type batteries, the company achieved net profit of 1,634 billion yuan in '23, an increase of 56.0% over the previous year. Looking at the single quarter, 23Q4 achieved revenue of 2,328 billion yuan, up 33.1% year on year, up 0.3% month on month, and realized net profit of 411 million yuan, up 81.9% year on year and 12.7% month on month. 24Q1 achieved revenue of 2,579 billion yuan, up 33.5% year on year, 10.8% month on month, and realized net profit of 578 million yuan, up 71.9% year on year and 40.6% month on month.
Benefiting from the large-scale expansion of TopCon battery production, the company's orders continued to grow. In terms of contract liabilities and inventory, as of the end of 2023, the company's contract debt amount was 18.111 billion yuan, up 111.61% year on year, up 10.41% month on month; inventory amount was 21.282 billion yuan, up 101.1% year on year, up 17.51% month on month. As of the end of 24Q1, the company's contract debt amount was 18.111 billion yuan, up 111.61% year on year, up 10.41% month on month; inventory amount was 21.282 billion yuan, up 101.1% year on year, up 17.51% month on month.
By business, photovoltaic cell equipment maintains a leading position in technology. On the TopCon side, the company's leading PE-Poly technology route layout and superior equipment products continue to be recognized by customers, and orders have maintained high growth. On the HJT side, the company won the bid for a mass production line from the world's leading photovoltaic companies, and achieved an average battery conversion efficiency of 25.4% on the company's Changzhou battery pilot line, and the average power of G12-132 heterojunction modules reached 727.69W. On the perovskite and perovskite lamination route, the company already has the ability to develop and supply MW grade mass production line equipment for perovskite and perovskite lamination.
Semiconductor equipment and special equipment for lithium battery vacuum have blossomed in many places. In the semiconductor sector, the company has 4 to 12 inch slot type and single wafer etching cleaning wet process equipment, and sales orders are constantly increasing. The company successfully developed silicon carbide high temperature heat treatment equipment and successfully shipped it to a leading domestic semiconductor IDM company after pre-inspection. In the field of lithium battery vacuum equipment, the double-sided wound copper foil sputtering coating equipment independently developed by the company was successfully launched, and the first roll of 4.5 μm composite copper foil was successfully released. At the same time, the company proposed a copper foil solution for the entire composite fluid collector line.
Profitability has increased steadily, and gross margin continues to rise due to orders. With leading technology and products, the company's gross margin reached 28.95% in 2023, an increase of 3.51 pct over the previous year. Looking at a single quarter, the company's gross profit margin for 23Q4 was 31.85%, up 1.42pct month-on-month, and the 24Q1 gross profit margin was 32.94%, up 1.09pct month-on-month.
Thanks to the increase in sales scale and the increase in payment recovery, the net cash flow from the company's operating activities reached 3.52 billion yuan in 2023, an increase of 142.36% over the previous year.
Profit forecast: As the company's TopCon equipment order delivery scale continues to expand, it is recommended to focus on the increase in orders brought about by the application of TopCon's new technology. In addition to this, the company also continues to receive orders for HJT, perovskite, etc., bringing new order growth points to the company. We expect the company's net profit from 2024-2026 to be 26.2, 35.0, and 3.02 billion yuan, corresponding to PE valuations of 9.1, 6.8, and 7.9 times on April 30, 2024, maintaining a “buy” rating.
Risk analysis
1. The increase in the company's market share falls short of expectations. The company has the ability to deliver the entire TopCon line and is a leading equipment leader in the TopCon industry. If the company's market share falls short of expectations, it will have a major negative impact on the company's profitability.
2. The development and promotion of new products falls short of expectations. The company has R&D projects in battery technology such as HJT and perovskite and wet etching cleaning equipment. If the development and promotion of the company's new products falls short of expectations, the company's future profitability will be affected.
3. The risk that industry demand falls short of expectations. If TopCon's demand for capacity expansion falls short of expectations, the order scale and profitability of the company's related equipment will be greatly affected.