Key points of investment
Performance continued to rise, and non-recurring profit and loss and new business affected profits. In 2024, Q1 achieved operating income of 2,953 billion yuan, +65.57% year over year; realized net profit of 76 million yuan, or -38.80% year on year; realized non-net profit deducted from mother of 84 million yuan, +37.25% year over year. Non-recurring profit and loss of 7.83 million, including a loss of 29.1 million from participating in Dongfang Risheng's fixed increase. In addition, in 2024, the main subsidiaries of silver powder, pan-semiconductor electronic paste, and adhesives, lost a total of 19 million yuan in Q1.
LECO's technical research promoted an increase in Q1 market share, and subsequent shipments are expected to rise sharply. In 2024, Q1's PV conductive silver paste shipped about 550 tons, of which N-type photovoltaic silver paste accounted for about 60%. As the company's LECO silver paste continued to break through cost reduction and efficiency, the company's average market share in Q1 was more than +10% month-on-month. At present, the company has achieved a market share of 40% for front silver paste, 30% for back silver paste, and a market share of more than 50% for main grids. Shipments in Q2 are expected to increase significantly compared to Q1. Q2 is expected to ship 800-900 tons, of which the N-type ratio will reach 80%. The company's annual shipment target for 2024 is 3,000 tons.
The pace of self-production of silver powder is leading the industry. The Liancheng Jingyin Project was put into operation in the early stages. Affected by the production period, the Q1 silver powder sector lost 11 million yuan. At present, the production capacity of silver powder in a single month has reached about 20 tons. The production capacity is expected to reach 30-40 tons/month by the end of the year. In the future, as shipments increase, it is expected that the monthly gross profit balance will be achieved. The 3,000-ton project in Changzhou has begun construction and is expected to be put into operation in Q4. Shipments are expected to reach the kiloton level in 2025, and the estimated self-supply ratio will reach more than 30%.
The platform-based strategy was effective, and 0BB glue was shipped. The company deployed 0BB related technology ahead of schedule and is at the leading level in the industry.
Q1 Achieved the shipment of 4 tons of 0BB positioning rubber in a single month. Among them, HJT products lead the market share, and TopCon Products is currently cooperating with customers from all over the industry to conduct tests.
Investment advice: The introduction of the company's new technology is expected to drive a continuous increase in shipments and N-type share. At the same time, the recent rise in silver prices will have a big impact on silver paste revenue, and the company's profit forecast for 2024-2026 will be raised. The company is expected to achieve operating income of 15.7.66/164.09/19.589 billion yuan in 2024-2026 (the original forecast values for 2024-2026 were 133.35/157.89/19.721 billion yuan, respectively), +53.24%/+4.23%/+19.18%, and the company's net profit to mother in 2024-2026 will be 704/8.42/966 million yuan (the original forecast values for 2024-2026 are 6.80/8.41/1,033 billion yuan, respectively), corresponding to the current P/E 13.42x/11.23x/9.78x, maintaining a “buy” rating.
Risk warning: (1) global PV installation fluctuation risk; (2) new technology introduction risk; (3) accounts receivable credit risk; (4) upstream and downstream price fluctuation risk.