Event: The company released its 2023 annual report and 2024 quarterly report. On April 25, the company released its 2023 annual report, achieving operating income of 59.146 billion yuan, a year-on-year decrease of 11.74%; realized net profit attributable to shareholders of listed companies of 3.416 billion yuan, a year-on-year decrease of 49.90%; and net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss of 2,575 billion yuan, a year-on-year decrease of 60.28%. At the same time, the company released its 2024 quarterly report. The first quarter achieved operating income of 9,933 billion yuan, a year-on-year decrease of 43.62%; realized net profit attributable to shareholders of listed companies - 880 million yuan, a year-on-year decrease of 139.05%; and net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss - 1,038 million yuan, a year-on-year decrease of 146.78%.
Shipments of silicon wafers are growing rapidly, and N-type silicon wafers remain leading the market share. In 2023, the company shipped about 114 GW of photovoltaic materials, a year-on-year increase of 68%, and the overall market share of silicon wafers was 23.4%. Among them, the large size (210 series) export market accounts for 60%, and the overseas silicon wafer export market accounts for 65%; N-type market share is 36.4%, maintaining the first place in the export market. By the end of 2023, the company's crystal production capacity reached 183 GW. The company's photovoltaic materials sector achieved annual revenue of 43.791 billion yuan, and the comprehensive gross margin increased 2.8% to 21.8% year-on-year. In the first quarter of 2024, the company shipped about 34.95 GW of photovoltaic materials, an increase of 40% over the previous year; N-type and large-size (210 series) products accounted for 88%, with N-type 210 accounting for more than 90% of the export market, continuing to maintain its leading position.
Continuously improve product technology, efficiency and cost advantages. In 2023, the company's photovoltaic materials business will accelerate technological innovation and process innovation around production methods, materials, processes, operations, etc., and improve relative competitiveness. By the end of 2023, the company's crystal per capita labor productivity was 25 MW/person/year, 71% ahead of the industry's second-best, and the average labor productivity rate of chips was 27 MW/person/year, 98% ahead of the industry's second-best; N-type products achieved a single monthly production lead of about 11.6%, and the number of kilogram chips produced was about 1.9. By the end of 2023, the company's total cost was leading the industry by about 0.03 yuan/W, building an industrial foundation for implementing local manufacturing in overseas barrier markets.
Continue to increase the component business layout, and fully iterate tile component products. In 2023, the company shipped 8.6GW of photovoltaic modules, an increase of 29.8% over the previous year. Thanks to product iterations and manufacturing method upgrades and manufacturing method upgrades in stacking 3.0 and 4.0 of the latest R&D, the photovoltaic cell and module business segment achieved revenue of 9.309 billion yuan. In 2023, the company completed a full iteration of tile overlay 3.0 products, completed the development of tile overlay 4.0 products and achieved mass production in the fourth quarter. The tile stack 4.0 product targets different application scenarios and uses a new design to give full play to the advantages of “tight arrangement”. Mainstream tile stacking products are two levels or more ahead of competitors, leading efficiency by more than 0.2%, achieving cost reduction and further improving the intellectual property library construction for tiled series products. By the end of 2023, the production capacity of high-efficiency tile stacked components reached 18 GW. In the first quarter of 2024, the company shipped 1.6 GW of photovoltaic modules, an increase of about 16.8% over the previous year.
Maxeon's impairment accruals, an overseas shareholding company, dragged down the company's performance. The European and American regions, where the main markets for Maxeon products of the company's shareholding company are located, were affected by the rapid decline in photovoltaic product prices, the adjustment of photovoltaic subsidy policies and the high interest rate environment, as well as the slow transformation of its own business. Both performance and stock prices fell sharply in 2023. Based on the precautionary principle, the company confirmed asset impairment losses of 1.01 billion yuan and fair value change losses of 440 million yuan for long-term equity investments and financial assets related to them, respectively, which had a significant negative impact on the company's performance.
Investment advice. Under current share capital, based on the company's profitability and industry supply and demand, we expect the company's net profit to be 21.13/32.33/4,028 billion yuan in 2024-2026, corresponding PE of 20.62X/13.48X/10.82X, maintaining the company's “buy” rating.
Risk warning: risk of technological change, risk of fluctuating raw material prices, risk of overseas operations, increased risk of industry competition, risk of demand falling short of expectations.