Core views
In 2023, the company achieved net profit of 3.416 billion yuan, a year-on-year decrease of 49.90%.
2024Q1 achieved net profit of 880 million yuan to mother, a year-on-year decrease of 139.05%. Depreciation and falling prices in the industrial chain dragged down performance. Affected by external factors such as the rapid decline in prices in major business markets such as Europe and the US, new distributed photovoltaic regulations in California, and continued high interest rates in the US, long-term equity investments and financial assets related to the company's participation in Maxeon confirmed significant impairment, which had a total negative impact of 1.69 billion yuan on the company's 2023 performance.
In 23 years, the company's silicon wafer shipments grew rapidly, achieving technological innovation and process progress, leading the industry at all costs. Furthermore, the company is at the leading level in the industry in terms of profitability, and the cost advantage is expected to be further highlighted in 2024.
occurrences
The company released the 2023 Annual Report & 2024 Quarterly Report
For the full year of 2023, the company achieved revenue of 59.146 billion yuan, a year-on-year decrease of 11.74%; realized net profit to mother was 3.416 billion yuan, a year-on-year decrease of 49.90%. On a quarterly basis, in 2023Q4, the company achieved revenue of 10.492 billion yuan, a year-on-year decrease of 38.87% and a year-on-month decrease of 23.73%; realized net profit to mother of 2,772 billion yuan, a year-on-year decrease of 252.48% and a year-on-year decrease of 267.80%. 2024Q1 achieved revenue of 9,933 billion yuan, a year-on-year decrease of 43.62% and a month-on-month decrease of 5.33%; realized net profit to mother of 880 million yuan, a year-on-year decrease of 139.05%.
Brief review
Shipments of silicon wafers are growing rapidly, and the N-type leading position is stable
In 2023, the company shipped 114 GW of silicon wafers, up 68% year on year, and the overall market share of silicon wafers was 23.4%, including 75 GW of large-size (210 series) products, accounting for 60% of the export market and 65% of the overseas silicon wafer export market; N-type had a market share of 36.4%, maintaining the first place in the export market. The company shipped 8.6 GW of components, an increase of 29.8% over the previous year. The 2024Q1 company shipped 34.95 GW of silicon wafers, up 40% year on year. N type and large size (210 series) products accounted for 88%, of which N type 210 export market accounted for more than 90%; module shipments were 1.6 GW, up 16.8% year on year. In terms of production capacity, as of the end of 2023, the company's crystal/module production capacity was 183/18 GW.
Adhere to technological innovation and process progress, leading the industry at all costs
At the end of 2023, the company's crystal per capita labor productivity rate was 25 MW/person/year, 71% ahead of the industry's sub-prime, 27 MW/person/year, and 98% ahead of the industry's second-best; N-type products achieved a single monthly production leading industry subgrade of about 11.6%, and the number of kilogram chips produced was about 1.9 pieces; against the backdrop of high unit depreciation of about 0.01 yuan/W, the company's total cost was leading the industry's secondary advantage of about 0.03 yuan/W. In terms of component technology, the company completed a full iteration of the tile stack 3.0 product in 2023, and Q4 completed the development of the tile stack 4.0 product and achieved mass production. The power is two or more levels ahead of competitors, and the efficiency is more than 0.2%.
Asset impairment dragged down performance in the short term, and overseas barrier market advantages are expected to be released in the long term due to external factors such as the rapid decline in prices in major business markets such as Europe and the US, the company's shareholder Maxeon experienced a sharp decline in performance and stock prices in 2023. Based on prudential principles, asset impairment losses of 1.01 billion yuan and fair value changes were confirmed separately for long-term equity investments and financial assets associated with them, which had a significant negative impact on the company's short-term performance. By promoting Maxeon's capital structure optimization, organizational change, and operational improvement, long-term companies can overcome short-term operating difficulties and give full play to their unique advantages in overseas barrier markets.
The profitability of silicon wafer manufacturers is clearly divided. It is expected that the market share in 2024 will further increase, and the profitability of each silicon wafer industry will be clearly differentiated in 2023. Relying on high turnover, excellent manufacturing capacity and leading cost advantages, the company is ahead of second- and third-tier manufacturers in terms of market share and profitability. At present, some second-tier manufacturers have slowed the pace of silicon wafer production expansion. Against this background, the company's market share is expected to increase further in 2024.
Profit forecast: We expect the company's net profit from 2024-2026 to be 15.1, 21.3, and 2.72 billion yuan, corresponding to the PE valuation on May 9, 2024, 29.7, 21.0, 16.5 times, giving it an “increase” rating.