Key points of investment
New production capacity was released in an orderly manner, and performance achieved steady growth
In 2023, the company achieved operating income of 81,556 billion yuan, up 11.74% year on year; achieved net profit of 7.039 billion yuan, up 27.21% year on year; achieved gross sales margin of 18.13%, up 3.35 pct year on year; achieved net sales margin of 8.82%, up 1.23 pct year on year. 2024Q1 achieved operating income of 15.971 billion yuan, down 22.02% year on year and 25.97% month on month; realized net profit of 483 million yuan, down 118.70% year on year and 275.79% month on month; gross profit margin was 5.06%, down 8.17 pct month on month, net profit margin -3.86%, down 4.90 pct month on month. Global PV installations reached a new high in 2023, and the photovoltaic industry as a whole maintained a rapid development trend. Based on the integration of the entire industry chain, the company effectively released battery and module production capacity, and achieved steady growth in performance.
Supply chain management continues to be optimized, and the scale of production and marketing is steadily expanding
In 2023, the company's solar cell module business achieved operating income of 78.175 billion yuan, a year-on-year increase of 11.13%, and a gross profit margin of 18.28%; achieved sales volume of 53.15 GW, a year-on-year increase of 39.47%, and both production and sales achieved rapid growth; in terms of profit, the company's PV module unit price was 1.47 yuan/W, a year-on-year decrease of 20.32%; unit gross profit was 0.27 yuan/W, an increase of 1.77% year on year. In 2023, the company increased its marketing and sales efforts, optimized supply chain management, improved the technical level of R&D processes, launched a talent incentive plan, and its business performance continued to grow steadily.
Domestic projects are expected to be implemented steadily, and overseas markets will expand further. By the end of 2023, the company's module production capacity will exceed 95 GW, and the production capacity of silicon wafers and batteries will be about 90% of the module production capacity, of which n-type battery production capacity will exceed 57 GW. In 2023, projects such as Vietnam's 2.5GW pultrating and slicing, Baotou 20GW pultrusion and slicing, Ningjin 10GW slicing, and Yangzhou 20GW battery were successfully put into operation, and the scale of production capacity increased in an orderly manner. New construction projects such as Vietnam's 5GW battery, US 2GW module, and 30GW crystal and silicon wafer in the Ordos High-tech Zone are progressing according to plan. The company's production capacity of silicon wafers, batteries and modules is expected to exceed 100GW by the end of 2024. The company is based on integrated production in the photovoltaic industry chain. As the company's new production capacity is implemented in an orderly manner and the global strategic layout progresses steadily, its scale advantage will further grow and continue to lead the industry.
Profit forecasting and valuation
The profit forecast was lowered and the “buy” rating was maintained. The company is the global leader in vertical integration of photovoltaic modules, leading the N-type product layout. Considering that module prices are at a historically low level and the company's profit is under phased pressure, we lowered the company's 2024-2025 profit forecast and added the 2026 profit forecast. We expect the company's net profit to the mother for 2024-2026 to 24.98 billion yuan, 50.03, and 7.461 billion yuan respectively (before the reduction, the company's net profit for 2024-2025 was 11.6.15 billion yuan and 13.932 billion yuan, respectively), and the corresponding EPS was 0.75 and 1.51, respectively. , 2.25 yuan, PE is 19, 10, and 6 times, respectively.
Risk warning: downstream demand falls short of expectations; risk of raw material price fluctuations; international trade policy fluctuations