Key points of investment
The three major sectors of intelligence+new energy+energy storage were promoted collaboratively. Net profit to the mother increased 20.48% year on year in 2023. In 2023, the company achieved operating income of 6.872 billion yuan, up 39.00% year on year; net profit to mother was 1,031 million yuan, up 20.48% year on year; net profit after deducting non-return to mother was 867 million yuan, up 23.61% year on year. The company plans to distribute a cash dividend of 0.303 yuan (tax included) to all shareholders, with a total discovery dividend of 618 million yuan (tax included); in addition, the company's share repurchase payment amount of 52 million yuan is treated as a cash dividend. Taken together, the company's cash dividend ratio for 2023 is 65.02%.
Smart sector: Smart meters are two-wheel drive at home and abroad, which is expected to benefit from the global power grid digital investment acceleration company continuing to strengthen the domestic market layout, stabilizing the bid share of the national and southern grids, and actively developing new markets, new products, and new businesses. There have been breakthroughs in distribution networks, smart AI management units, rail meters, and Huawei projects. In 2023, the company won a total bid amount of about 626 million yuan; in the 2023 China Grid Measurement Product Framework Bidding Project, the total bid amount was about 626 million yuan. Overseas, the company's products have covered more than 30 countries and regions around the world, seizing development opportunities in the overseas electricity distribution market, expanding market space with various partners around the world, and achieving rapid growth in overseas sales performance. Among them, the company cooperated with Rangel, a leading company in the global metering industry, to focus on expanding its market share in Western Europe and the Asia-Pacific region; through its wholly-owned subsidiary EGM, it obtained bid shares from several power authorities in the Polish market. All contracts were fulfilled and shipped during the year, accounting for more than 30% of the market share.
New energy sector: The entire TopCon battery production base was completed, and the number of new energy power plants started and connected to the grid rapidly increased. At the end of September 2023, the first phase of the company's high-efficiency N-type TopCon photovoltaic cell production base phase 1 project of 6GW was successfully completed, and the entire line was completed. Due to factors such as falling prices in the new energy industry chain, expiration of targets, and further clarification of the national land policy, construction of photovoltaic and wind power plants has been accelerated and connected to the grid. In 2023, the company's projects under construction exceeded 1000 MW, and the grid connection scale exceeded 600 MW. Apart from the photovoltaic project, the first wind power project in 2023 was connected to the grid. By the end of 2023, the installed capacity of the power plant project contracted by Lin Yang had exceeded 12 GW, an increase of 50% over the previous year.
Energy storage sector: Continuously improve the layout of the upstream and downstream energy storage industry chains, and make every effort to promote the rapid development of the energy storage business upstream battery chain. The company participated in the joint venture Jiangsu Yiwei Linyang Energy 10 GWh special lithium iron phosphate battery project for energy storage, which has now been fully produced. The company signed a strategic cooperation framework agreement with Huawei Digital Energy to jointly develop a safe and cost-effective energy storage system solution based on lithium iron phosphate batteries for energy storage. In 2023, following the commissioning of two fully automatic energy storage PACK production lines at the Jiangsu Qidong energy storage battery module (PACK) and DC side system manufacturing base, the third fully automatic energy storage PACK production line built by the company at the Hebei Pingquan Industrial Base was also successfully put into operation at the end of 2023. Currently, the total annual production capacity of the company's energy storage packs and systems has reached 6 GWh. In 2023, Jiangsu Linyang Energy Storage Technology Co., Ltd., a holding subsidiary of the company, successfully completed the supply and grid connection of several energy storage projects, and delivered more than 2 GWh of energy storage equipment and system products.
Profit forecasting and valuation
Lower the profit forecast and maintain the “buy” rating: The three business segments of the company's intelligence, new energy, and energy storage are progressing collaboratively. Considering that the sales and profit of the TopCon battery and energy storage business were lower than expected, we lowered the company's profit forecast for 2024 and 2025 and added a profit forecast for 2026. The net profit to the mother for 2024-2026 is 11.94, 13.81, and 1.58 billion yuan, respectively. The corresponding EPS is 0.58, 0.67, and 0.77 yuan, respectively.
Risk warning
Demand for PV installations fell short of expectations; market competition intensified; raw material prices fluctuated greatly.