Incident Overview
On April 25, 2024, Dyl Laser released its 2023 annual report and its report for the first quarter of 2024: operating income in 2023 was $1,609 million, up 21.49% year on year; net profit to mother was 461 million yuan, up 12.16% year on year; gross margin was 48.38%, up 1.29 pct year on year; net margin was 28.66%, down 2.39 pct year on year. Among them, revenue from photovoltaic cell laser processing equipment reached 1,367 billion yuan, accounting for 84.99%, up 17.03% year on year; accessories, maintenance and technical service fees accounted for 14.53%, up 49.9% year on year; consumer electronics laser processing equipment began to be released in '23, with revenue of 7.7699 million yuan, accounting for 0.48%.
The first quarter of 2024 achieved operating income of 450 million yuan, up 29.60% year on year and 1.46% month on month; net profit to mother was 135 million yuan, up 44.48% year on year, up 11.00% month on month; gross margin was 48.65%, up 1.6 pct year on year, up 1.28 pct month on month; net margin was 29.98%, up 3.08 pct year on year, up 3.36 pct month on month.
Focus on the main business and actively expand into new fields
The company is committed to applying original laser technology to the photovoltaic industry. At present, it has successfully applied laser processing technology to various high-efficiency solar cell and module processes such as PERC, TopCon, IBC, HJT, perovskite, half-sheet, and tiled tiles; at the same time, it is actively developing laser processing equipment in the fields of high-end consumer electronics, new displays and integrated circuits.
1. TopCon: Laser doping (TCSE) and laser-induced sintering (LIF) equipment applied to TopCon achieved mass production orders, and LIF equipment effectively increased TopCon conversion sales by 0.3%; 2. HJT: LIA laser repair technology received orders from European customers; 3. IBC: Advanced technology for laser micro-etching equipment used in back contact batteries (BC), and continues to obtain mass production orders from leading companies;
4. Laser transfer: The company's laser transfer technology, the world's first laser transfer technology, is suitable for various types of cell technology such as PERC, TopCon, HJT, IBC, etc., which greatly saves silver paste consumption, improves printing consistency, and can also reduce the shading area and breakage rate of the grid, reduce costs and increase efficiency significantly, and has broad application prospects.
5. Component side: The new laser welding process under development can simplify the production process, reduce battery damage, and improve welding quality. A mass production prototype has been delivered and is currently being tested. The company launched a complete component line equipment, using a fully automatic full-line design, which simplifies the component production process from battery loading to component welding, and has no serial welding, layout, or gluing processes.
6. Outside the field of photovoltaics: In industries such as consumer electronics, new displays, and integrated circuits, the company is actively expanding technology. The company's TGV laser microporous equipment performs microporous and microslot processing on glass substrates of different materials to provide conditions for the implementation of subsequent metallization processes, and is used in semiconductor chip packaging, display chip packaging and other fields.
Increase investment in R&D and enhance technological innovation capabilities
The company has R&D centers in Wuhan, Wuxi, Israel, and Singapore, and continues to increase investment in R&D and innovation. In 2023, the company's R&D personnel increased to 525, accounting for 30.52% of the total number of people. R&D expenses were 255 million yuan, an increase of 91.65% over the previous year, accounting for 15.58% of revenue. As of December 31, 2023, the company and its subsidiaries had a total of 262 domestic and foreign patents. In the first quarter of 2024, the company spent 69.5569 million yuan on R&D, an increase of 60.35% over the previous year.
Investment advice
Considering the pace of acceptance and the impact of the pace of industry expansion, we have fine-tuned the company's profit forecast. We forecast that the company's revenue for 2024-2026 will be 23.61/28.50/3,944 billion yuan (24-25 years ago worth $23.10/3.178 billion), and net profit to mother will be $6.31/7.92/10.70 billion ($704/940 million before 24-25), and the diluted EPS calculated using the current total share capital of 273 million shares is $2.3 1/2.90/3.92 billion yuan. The PE multiples of the company's current stock price forecast EPS for 2024-2026 are 20/16/12 times, respectively. Considering that the company is a leader in photovoltaic laser equipment, the penetration rate of the company's new products is expected to continue to increase and maintain a “buy” rating.
Risk warning
1) The risk that the subsequent expansion of production in the photovoltaic industry falls short of expectations; 2) the risk of innovation brought about by technology iteration; 3) the risk of uncertainty in new business expansion; 4) the risk of errors in measuring market space; 5) the risk of errors in measuring market space; 5) the risk that the information based on the research is not updated in a timely manner and does not fully reflect the company's latest situation.