Incident: The company achieved operating income of 1,701 billion yuan in 2023, an increase of 30.50% over the previous year; achieved net profit of 166 million yuan, an increase of 28.70% over the previous year. In 2024Q1, we achieved revenue of 293 million yuan, an increase of 36.63% year on year, and realized net profit to mother of 39 million yuan, an increase of 91.58% year on year.
Demand for SVG and inverters was strong, and gross margin increased year-on-year. In 2023, the SVG business achieved revenue of 973 million yuan, up 56.77% year on year; gross profit margin was 22.67%, up 0.26pp year on year. The inverter business achieved revenue of 355 million yuan, an increase of 56.71% year on year; gross profit margin was 34.48%, up 4.49pp year on year.
The energy storage business achieved revenue of 177 million yuan, down 38.34% year on year; gross profit margin was 20.61%, up 1.73 pp year on year. In 2023, SVG's gross margin bottomed out and rebounded, with an overall gross profit margin of 27.65%, up 1.37pp over the previous year. This was mainly due to the increase in the scale of the company's revenue during the reporting period and the increase in gross margin of products developed through cost reduction. The operating revenue of 2024Q1 and SVG products increased by about 85% compared to the same period last year, leading to rapid growth in the company's total revenue and net profit. Due to the year-on-year increase of low-power SVG, the profitability of low-power SVG is better than that of high-power models. 2024Q1's comprehensive gross profit margin was 31.73%, an increase of 1.39pp over the previous year.
Strengthen efforts to expand traditional industries and overseas customers, and accelerate the launch of new products. In the field of new energy, SVG bidding competition is fierce, and gross margin is low. In order to guarantee the quality of profits, the company appropriately abandoned some low price orders. In 2023, the revenue of the photovoltaic industry increased 18.19% year on year, and the revenue of the wind power industry increased 32.49% year on year. Although the growth rate was lower than that of the industry, the company maintained a good level of profit. Revenue from other industries increased 37.22% over the previous year, mainly due to the development of the company's business and the advancement of marketing reform measures, vigorously developing other industries such as traditional industries through insight into market demand and expanding sales channels to promote an increase in revenue. The company successfully mass-produced G73 high-voltage inverter products specifically for the Russian market. The 690V/1500kW four-quadrant inverter speed control device developed by the company was successfully launched and sent to Europe, marking a new breakthrough in new landscape technology innovation and overseas market expansion. In the inverter business, the company continues to launch new products and is committed to breaking through high-power application performance.
New orders got off to a good start, and contract debt continued to grow. In 2023, the company signed 2.1 billion yuan of new orders, an increase of 8% over the previous year, including 1.2 billion yuan for SVG products, an increase of 40% over the previous year, and 150 million yuan for high-end rail transit equipment, an increase of 50% over the previous year. In 2024Q1, 432 million new orders were signed, an increase of 29% over the previous year, including 236 million yuan for SVG products, an increase of 42% over the previous year, and 80.8 million yuan for energy storage products, an increase of nearly six times over the previous year. As of the end of 2024Q1, the company's contract debt was 158 million yuan, an increase of 13.41% over the end of 2023.
Profit forecasting and investment advice. We expect the company's net profit to be 2.28, 2.79 million yuan, and 334 million yuan in 24-26 years, respectively, and the corresponding PE is 15, 13, and 10 times, respectively. The company's SVG business is increasing its efforts to develop traditional industrial fields and Guonan Network business, and gross margin is expected to continue to improve. New products in the inverter business have been launched one after another, and high-power application scenarios are speeding up domestic replacement efforts. Accelerate the SVG and inverter business overseas. We gave the company a PE valuation of 20 times in 2024, corresponding to a target price of 32.6 yuan, maintaining a “buy” rating.
Risk warning: Risks such as lower order growth than expected, rising raw material prices, and increased industry competition.