Core views
In 2023, the company achieved operating income of 129.498 billion yuan, a year-on-year increase of 0.39%, and realized net profit to mother of 10.751 billion yuan, a year-on-year decrease of 27.41%. 2024Q1 achieved a year-on-year decrease of 37.59% in revenue of 17.674 billion yuan, and realized net profit of 2.350 billion yuan, a year-on-year decrease of 164.61%. Due to the impact of falling product prices, US customs suspensions and technology iterations, the company calculated impairment reserves of 70.25/2,814 billion yuan in 2013/24Q1, which dragged down the company's performance. In '23, the company's shipments grew rapidly, and integrated production capacity increased steadily. 23Q4 has achieved breakthroughs in mass production efficiency and cost reduction in HPBC technology. The new second-generation HPBC product will be launched in the second half of '24.
We expect that in the context of falling industry prices and business fluctuations, the company will expand HPBC on a large scale, and the market share is expected to continue to increase.
occurrences
The company released its 2023 annual report and 2024 quarterly report
In 2023, the company achieved operating income of 129.498 billion yuan, a year-on-year increase of 0.39%, and realized net profit to mother of 10.751 billion yuan, a year-on-year decrease of 27.41%, putting pressure on the company's performance. On a quarterly basis, 2023Q4 achieved revenue of 35.398 billion yuan, a year-on-year decrease of 16.33% and a year-on-month increase of 20.21%; realized net profit to mother of 942 million yuan, a year-on-year decrease of 124.57% and a decrease of 137.50%.
2024Q1 achieved a year-on-year decrease of 37.59% in revenue of 17.674 billion yuan, and realized net profit of 2.350 billion yuan, a year-on-year decrease of 164.61% and a year-on-year decrease of 50.07%.
Brief review
In 2024, the target is to ship 135GW of silicon wafers and 90-100GW of battery+modules, and the integrated production capacity is steadily increasing. In terms of shipment volume, the company achieved 67.52 GW of module shipments in 2023, an increase of 44.40% year on year, including export sales of 66.44 GW and silicon wafer shipments of 125.42 GW, an increase of 47.45% year on year, of which 53.79 GW was external sales. In terms of production capacity, the company's Ordos 46GW silicon wafer project, 30GW battery project, and Wuhu 10GW module projects have been put into operation one after another. By the end of 2023, the company's own production capacity of silicon wafers, batteries and components reached 170 GW, 80 GW, and 120 GW. Furthermore, with the official commissioning of 2024Q1's 5GW module joint venture plant in Ohio, the company's shipping capacity in the US market will be enhanced. In the next three years, the company's annual production capacity of monocrystalline silicon wafers is expected to reach 200GW, of which “Terry” silicon wafers will account for more than 80%; the annual production capacity of BC batteries will reach 100GW; and the annual production capacity of monocrystalline modules will reach 150GW.
Focus on HPBC and TopCon capacity upgrades to achieve breakthroughs in HPBC technology. The company has accelerated production capacity upgrades and mass production of HPBC and TopCon. Xixian's annual production capacity of 29GW and Taizhou's 4GW high-efficiency HPBC battery production capacity has all been put into operation. In terms of battery technology, the company's self-developed HPBC achieved breakthroughs in mass production efficiency and cost reduction in 2023Q4, and has now achieved large-scale shipments exceeding 2 GW per month; the company has successfully developed HPBC second-generation products, which can achieve more than 5% higher module power than TopCon modules of the same specification, and the new product is scheduled to be launched in the second half of '24.
Accrued impairment affects the company's performance in the short term, and sufficient capital on hand is beneficial to the release of long-term performance. Affected by falling product prices, US customs suspension orders and technology iteration, the company calculated inventory and fixed asset price reduction reserves of 6.757 billion yuan in 2023, including 5.171 billion yuan (including additional inventory price reduction provisions of about 1.35 billion yuan due to long-term stagnation of some products due to US policy effects); product prices in various parts of the PV industry chain continued to decline in the first quarter of 2024. The company calculated an impairment reserve of 2,649 million yuan for fixed assets. During the period of fluctuating industry operations where prices were declining, the company had monetary capital of 57 billion yuan at the end of 2023, sufficient cash reserves, a balance ratio of 56.87%, and an interest-bearing debt ratio of 11.62%. The company's profit and self-resilience to risks were strong, which could support the company to move through the industry cycle and release long-term performance.
Profit forecast: We expect the company's net profit to be 30.7, 42.0, and 5.14 billion yuan in 2024-2026, corresponding to the PE valuation of 46.0, 33.6, and 27.5 times on May 10, 2024, giving a “gain” rating.