Core views
The company released its 2024 quarterly report. Revenue growth was significant, and all segments of the business grew, exceeding market expectations. The growth rate of performance was slower than the growth rate of revenue due to new plant expenses, costs, etc. It is expected that the company's charging stations and energy storage sectors will maintain high growth this year, and continue to expand into overseas markets such as Europe and the US. Profitability is expected to be maintained or improved as overseas share increases and technology iteration reduces costs. The industrial power supply and battery chemical business continued to grow under the recovery of downstream industrial demand and the need to expand battery production. We believe that the company is the core target of large storage PCS and charging piles, taking into account domestic and overseas markets, and is expected to benefit from the growth of the global large storage and charging pile industry.
occurrences
The company achieved revenue of 599 million yuan in the first quarter of 2024, up 33.8% year on year, down 34.7% month on month; return to mother performance of 66 million, up 6.0% year on year, down 48.9% month on month; after deducting non-performance of 60 million yuan, up 5.0% year on year, down 50.9% month on month.
Brief review
All major business segments achieved growth, and revenue exceeded market expectations
The company's revenue increased by 33.8% in the first quarter. As a traditional off-season for industrial power supplies, energy storage, charging stations, etc., revenue growth exceeded market expectations. This was particularly difficult when Q4 had already achieved a 45.7% year-on-year increase in revenue last year. As mentioned in the first quarterly report, this increase was due to the increase in sales revenue of industrial power supplies, new energy conversion equipment, electric vehicle chargers, and battery testing and chemical equipment in the current period, so the company's four main business segments all grew. Previously, the market expected that with the energy storage business increasing by more than 250% last year, revenue may remain flat or decline in Q1 this year. Furthermore, the market was concerned about battery conversion equipment as the expansion and production expansion of the lithium battery industry slowed down this year. The quarterly report shows that the company still maintains strong competitiveness and growth momentum in various business segments.
The performance growth rate was relatively slow. Due to the high initial costs and expenses of the Suzhou factory, the company's gross sales profit margin in the first quarter was 39.54%, up 0.9 pct from month to month, and decreased by 3 pcts year on year. The year-on-year decline in gross margin was due to the high initial cost of operation of the Suzhou plant. Furthermore, the overseas energy storage business accounted for a relatively high share of the energy storage business in the first quarter of last year, and China has now become the world's largest energy storage market. The domestic share of the company's energy storage business in the first quarter of this year is relatively high, which is expected to have a certain impact on gross margin. In terms of expenses, the company's sales, management, and R&D expenses in the first quarter were 0.84, 0.29, and 59 million, respectively, up 38.6%, 38.7%, and 32.2% year on year, respectively. Financial expenses were about 75,000, down 44.4% year on year.
Expense increases are mainly due to sales, R&D, number of management personnel, and salary increases.
Investment recommendations and performance forecasts
The company's charging pile and energy storage two-wheel drive characteristics have been formed, and it is expected to continue to maintain rapid growth and continue to penetrate overseas markets. The company's net profit for 2024 and 2025 is estimated to be $549 million and 768 million, respectively.