Incident: The company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved revenue of 1,936 billion yuan, +34.30% year over year; net profit to mother of 169 million yuan, +54.56% year over year; deducted non-net profit of 165 million yuan, +44.46% year over year. In Q1 2024, revenue was 348 million yuan, -3.97% year on year; net profit to mother was 11 million yuan, -78.33% year over year; after deducting non-net profit of 190 million yuan, -80.15% year over year.

In 2023, the company achieved high growth in fixed brackets, and a breakthrough in tracking brackets. The company's 2023 PV bracket business revenue was 1,674 billion yuan, +35.64% year on year; bracket shipment volume was 6.87 GW, +49.86% year on year; gross profit margin was 19.33%, +1.41 pct year on year. Looking at the subregion, the domestic market revenue of the bracket business was 695 million yuan, or +115.28%, representing a high increase in domestic ground power plant installed capacity; European market revenue of 287 million yuan, +3.28% year over year, which indicates a decline in European demand since the third quarter of 2023; in emerging markets, the company maintained a high growth rate in the Philippines, Malaysia, Africa, Saudi Arabia, etc., and achieved a sales revenue breakthrough of 3 million yuan in the Canadian market.

By product, in 2023, the company achieved revenue of 881 million yuan, +4.79%; the ground bracket achieved revenue of 634 million yuan, +75.56% year over year; the smart stand tracker achieved revenue of 159 million yuan, +395.49% year over year, and the company achieved a breakthrough in the tracking bracket business.

The gross margin of the Q1 support business remained stable in 2024, and profit fluctuations were mainly due to cost-side disturbances. We expect the company's bracket business revenue for the first quarter of 2024 to be about 300 million yuan, corresponding to the stent shipment volume of 1GW+, and the gross margin will remain stable. The decline in profit in the first quarter was mainly due to cost-side disturbances. Financial expenses rose markedly due to exchange losses. In addition, sales expenses also increased slightly.

Investment advice: We expect the company's net profit to be 1.772/2.02/240 million in 2024-2026, corresponding EPS of 0.63/0.74/0.88. The company's basic market in Australia and Europe is stable, and the emerging markets are expected to grow steadily. It is covered for the first time, giving it an “gain” rating.

Risk warning: Risk of fluctuations in overseas demand, risk of fluctuations in raw material prices, increased risk of market competition.