The company released the 2023 annual report and the 2024 quarterly report, and achieved net profit of 43 million yuan for the full year of 2023; the company had leading production capacity and technical advantages, continued to develop overseas markets; and maintained an increase in holdings rating.
Key points to support ratings
2023 net profit of 43 million yuan: The company released its 2023 annual report, achieving full year operating income of 6.932 billion yuan, a year-on-year decrease of 23.54%; realized net profit of 43 million yuan, a year-on-year decrease of 93.14%; realized net profit deducted from non-mother of 58 million yuan, a year-on-year decrease of 89.77%. According to the annual report calculation, 2023Q4 lost 232 million yuan in net profit to mother, all of which changed from profit to loss over the same period last year.
Net profit for the first quarter of 2024 was 16.36 million yuan: The company released its 2024 quarterly report. In 2024Q1, net profit attributable to mother was 16.3569 million yuan, a year-on-year decrease of 91.04%. After deducting non-return net profit of 4.3125 million yuan, a year-on-year decrease of 97.46%. 2024Q1's gross sales margin fell 8.12 percentage points year on year to 11.84%; net sales margin fell 7.92 percentage points year on year to 0.60%.
Battery technology and production scale advantage: The company has nine major factories in Guangzhou, Zhuhai, Zhumadian, Changzhou, Liuzhou, Foshan, Quzhou, Qingdao, and Vietnam. It has established offices in the US, Germany, Japan, and Indonesia, and sells its products to more than 50 countries and regions, including the United States, Germany, and Japan. In terms of new technology, the company's sodium-ion batteries have achieved large-scale mass production and shipment and signed a sodium ion energy storage power plant demonstration project; the energy efficiency of Fengpeng Battery 314Ah is higher than 95% under 0.5P conditions, the cycle life exceeds 10,000 times, and the calendar service life is 25 years, which has significantly improved the economy of the energy storage system.
The strategic position of the energy storage business continues to strengthen: According to the company's annual report, the company's energy storage business revenue share increased in 2023, and the revenue of large-scale energy storage businesses increased significantly. The company's energy storage shipments remain at the forefront of the industry. According to statistics from SNE Research/EESA and other agencies, the company ranked among the top six Chinese companies in global energy storage battery shipments in 2023; according to GGII statistics, the company ranked in the top three for industrial and commercial energy storage system shipments in 2023. In the future, the company will rationally build production capacity, and steadily and continuously promote the release of production capacity to support the vigorous development of the energy storage business.
valuations
Combined with the company's annual report and quarterly report, considering that competition in the industry is still fierce, we adjusted the company's predicted earnings per share for 2024-2026 to 0.80/1.07/1.44 yuan (the original forecast diluted earnings per share was 2.60/3.44/- yuan), corresponding to a price-earnings ratio of 30.4/22.8/16.9 times; maintaining an increase in holdings rating.
The main risks faced by ratings
Demand in the industrial chain fell short of expectations; raw material prices fluctuated unfavourably; NEV industry policies fell short of expectations; NEV products fell short of expectations.