Description of the event
The company's revenue in 2023 was 8.141 billion yuan, up 44.13% year on year, and net profit to mother was 508 million yuan, up 104.36% year on year, after deducting non-net profit of 463 million yuan, up 87.68% year on year. Among them, 2023Q4 revenue was 2,639 billion yuan, up 31.57% year on year, and net profit to mother was 62 million yuan, up 255.95% year on year, after deducting non-net profit of 0.42 million yuan, up 292.72% year on year. 2024Q1 revenue was 1,184 billion yuan, down 20.54% year on year, net profit to mother was 74 million yuan, down 48.76% year on year, after deducting non-net profit of 60 million yuan, down 54.32% year on year.
Incident comments
Looking at the 2023 split, the new energy business revenue was 4.29 billion yuan, up 143% year-on-year, and the gross margin was 21.9%. In 2023, the company's energy storage business expanded rapidly. Domestic and global energy storage PCS shipments ranked first. Centralized PCS landed in several major storage projects in the US, and photovoltaic string inverters were successfully used in Italy, Vietnam, Poland and Brazil. Data business revenue was 3.78 billion yuan, down 1% year on year, mainly due to downstream customers shifting from traditional IDC leasing to computing power leasing. The gross margin was 32.4%, which was basically the same as the previous year. In terms of net profit, the 2023 expense ratio was 18.9%, down 1.79pct year on year. Due to rapid market expansion, the sales expense ratio increased year on year, and other expenses were better controlled.
On a quarterly basis, since Q4 is the traditional peak procurement season, revenue from the new energy business is expected to increase month-on-month in 2023Q4, and gross margin is expected to decrease slightly month-on-month. It is determined that due to low gross profit energy storage systems being delivered in Q4, data business revenue is expected to remain flat and increase slightly month-on-month, and gross margin remains relatively good. The 2023Q4 expense ratio was 21.2%, and the sales expense ratio increased year-on-month. Revenue from the new energy business is expected to drop significantly year-on-year in 2024Q1. First, Q1 is the traditional low season for inverter products. Second, orders for energy storage systems are generally large and unevenly distributed. Most orders for energy storage systems in 2024 will land in Q2 and the second half of the year. Data center business revenue is expected to remain flat year-on-year in 2024Q1. Some of these computing power businesses have been implemented, with a slight increase in gross profit compared to traditional IDC business. Due to declining sales and cost rigidity, the Q1 expense ratio was 25.5%, which had a significant impact on net profit.
Looking ahead to 2024, in terms of the new energy business, domestic energy storage is expected to achieve a growth rate of 60-70% in 2024. At the same time, the new energy business is expected to grow by about 50% due to the release of large overseas US storage demand and emerging market volume. In terms of data business, it has benefited from the construction of a nationally guided intelligent computing center, and the demand for related equipment procurement has increased. At the same time, the company is actively promoting smart electricity and power products to go overseas. It is expected that data center products and smart power will achieve a growth rate of 10-15%. The IDC business will transition to a computing power business, and the increase can be expected. In terms of profit, the company is leading in energy storage PCS and system technology, taking the lead in implementing 100 megawatt grid applications. Long-term liquid-cooled energy storage has also launched a benchmark project, which is expected to benefit from improved energy storage performance requirements and maintain order quality and profit. As the scale effect is reflected, the cost rate is expected to be further controlled. We expect the company to have net profit of 740 million yuan in 2024, corresponding to 17 times PE, and continue to recommend.
Risk warning
1. Demand for energy storage terminals falls short of expectations;
2. Competition in the industrial chain has intensified.