The company released its 2023 annual report: Achieved revenue of 686 million yuan for the full year of 2023, +5.6% year-on-year, net profit of 220 million, +15.0% year-on-year, gross profit margin of 57.4%, +2.5pct year over year; 23Q4 achieved revenue of 143 million, year-on-month, +32.7% month-on-month, net profit of 34 million yuan, year-on-year +12.3%, month-on-month -55.1%, gross profit margin of 51.6%, year-on-year +11.1 pct. The company's first report in 2024:24Q1 achieved revenue of 159 million yuan, +25.0% year-on-month, +11.6% month-on-month, net profit of 31 million yuan, +3.3% year-on-year, -9.4% month-on-month, gross profit margin of 47.3%, year-on-year -5.7pct, and -4.3pct month-on-month.
Distributed photovoltaic power plants are progressing steadily, and other business regulations are adjusted according to market conditions and current circumstances. The photovoltaic power generation business achieved a double increase in volume and profit. In '23, PV power generation revenue was 600 million yuan, +12.8% year on year, gross profit margin 65.7%, +0.1 pct year on year, and comprehensive business net profit margin of 32.1%, and +2.6 pct year on year. Currently, the company has accumulated a total grid-connected capacity of about 828 MW of distributed photovoltaic power plants, and about 163 MW of self-owned distributed photovoltaic power plants under construction, to be built, and to sign contracts. At the same time, it has successfully issued convertible bonds to build distributed projects, which is expected to optimize the company's financial level and balance and liability structure. Furthermore, due to phased overcapacity in the photovoltaic industry, PV module and EPC profits were compressed. The company reviewed the current situation and flexibly adjusted its business scale, sold PV modules to foreign countries and accepted EPC orders depending on gross margin.
Relying on distributed photovoltaic power plant platform resources, we are steadily promoting the integrated layout of optical storage and charging. On the one hand, the electricity revenue from the power generation business is settled monthly, providing a stable income and cash flow to provide strong financial support for the development of diversified businesses such as industrial and commercial storage, household storage products, and charging piles; on the other hand, the company has GW level industrial and commercial user resources. The company can focus on these highly sticky industrial and commercial customers to improve a full set of integrated power generation+charging+storage point services and dig deeper into the value of industrial and commercial resources. Furthermore, the company aims to estimate that industrial and commercial storage projects will be implemented on a certain scale in 24, accelerate the R&D and manufacture of household storage products, plan off-grid energy storage, portable mobile power supplies, and off-grid energy storage products, and launch them into target markets.
Profit prediction and funding rating: The steady development of distributed power plant investment and operation business, and the expansion of Dengka's storage and charging products are expected to drive the company's performance development. Considering factors such as the intensification of industrial competition and the progress of project integration, we revised our profit forecast. We expect net profit to be 2.7/3.4/40 billion yuan in 24-26 (the previous forecast was 3.5/450 million yuan in 24-25), an increase of 23%/25%/17% year-on-year. The current stock price corresponds to PE 17/13/11 times, respectively, maintaining the “buy” rating.
Risk warning: industry demand falls short of expectations; product prices fluctuate greatly; market expansion falls short of expectations, etc.