Event: The company released its 2023 annual report and 2024 quarterly report

In 2023, the company achieved operating income of 7.35 billion yuan, +56.1% year on year; net profit to mother of 850 million yuan, 31.2% year on year; deducted non-net profit of 81 million yuan, 28.5% year on year. Gross profit margin 30.76%, -1.69pct; period expense ratio 15.33%, year-on-year -1.42pct; net profit margin 11.78%, year-on-year -1.73pct.

Corresponding to revenue of 1.7 billion yuan in 2024Q4, -5.1% year on year; net profit to mother - 40 million, -111% year over year; deducted non-net profit - 79 million yuan, -121.7% year on year. Gross profit margin 19.56%, net profit margin -1.9%.

2024Q1, the company achieved revenue of 1.13 billion yuan, -34.5% year on year; net profit attributable to mother - 28 million, -109% year on year; deducted non-net profit - 35 million yuan, -110% year on year. Gross profit margin 27.5%, period expense ratio 29.1%, net profit margin -1.7%.

The grid-connected inverter and energy storage battery business is growing steadily, and energy storage inverters are under pressure:

In 2023, the company's inverter sales volume was about 686,300 units, which is basically the same as the previous year. Among them, the sales volume of grid-connected inverters was about 532,200 units, +15.4% year on year; due to pressure from the industry to remove storage, the sales volume of energy storage inverters was about 154,400 units, -32.2% year over year. The company's overseas inverter sales volume was about 443,600 units, -22.7% year on year; domestic inverter sales volume was about 242,700 units, +118.3% year over year. In 2023, the company's energy storage battery sales volume was about 341.15 MWH, +27.7% year-on-year; domestic household distributed system sales volume was about 513.28 MW.

The industry is at the end of the inventory, waiting for demand to improve:

In 2023, the company's products have been sold in batches to Germany, the Netherlands, Australia, Italy, Sweden, Spain, the Czech Republic, Brazil, New Zealand, Greece, Poland, Belgium, Ireland and many other countries and regions around the world. We judge that as demand from the European market comes to an end, demand from emerging markets continues to explode, and the company's performance is expected to gradually pick up in 2024, waiting for demand to improve quarter by quarter.

Profit Forecast and Valuation:

The company is a leader in the distributed optical storage market and is expected to benefit from industry expansion and demand growth in the long term.

Considering industry competition and the company's energy storage and shipping pressure in the short term, we expect the company's revenue in 2024-2026 to be 90.5/11.6/14.6 billion, +23.1/32.1/ 22.1% year on year; net profit to mother of 7.1/8.8 billion, 1.13 billion, -16.7/+24.5/ +28% year on year; current stock price corresponding to PE is 23/20/16 times, respectively, giving a “buy” rating.

Risk warning: industry competition intensifies, industry growth falls short of expectations, raw material price pressure