Event: The company released its 2023 annual report and its quarterly report for the first quarter of 2024. In 2023, the company achieved operating income of 118.682 billion yuan, a year-on-year increase of 43.55%, and achieved net profit of 7.440 billion yuan, an increase of 153.20% over the previous year; realized net profit of 6.904 billion yuan after deduction, an increase of 152.09% over the previous year. In 2024, Q1 achieved operating income of 23.084 billion yuan, a year-on-year decrease of 0.30%; realized net profit to mother of 1,176 billion yuan, a year-on-year decrease of 29.09%. The company's performance was in line with expectations.
Q1 Performance was under pressure, and shipments increased year-on-year. In Q1 of '24, due to falling prices in the PV industry chain, the company's profitability was under pressure, but the company's shipments grew rapidly. According to the company announcement, 24Q1 achieved a total shipment volume of 21.91 GW, of which 20 GW of modules were shipped, and total shipments increased by 51.19% over the same period last year.
N-type technology is leading the industry, and TopCon's share of shipments has increased rapidly. In 2023, the company maintained its lead in technology and mass production scale for N-type products. According to the company's annual report, 78.52 GW of modules were shipped for the full year of '23, of which 48.41 GW of N-type modules increased by 352% over the same period last year. The company continues to build and improve integrated production. By the end of 23, the vertical integrated production capacity in the three core sectors of silicon wafers, batteries and modules reached 85 GW, 90 GW and 110 GW respectively, and the integrated production capacity support rate reached more than 85%.
The company's profit forecast was lowered and the company's “gain” rating was maintained. Our previous profit forecast for the company for 24-25 was 92.62 billion yuan (10.887 billion). Considering the intensification of competition in the industrial chain and the decline in component prices, we lowered the company's profit forecast for 24-25. The company's net profit for 24-26 is estimated to be 31.15/47.32/6.691 billion (down/down/increase), and the current stock price corresponds to 24-year PE 25 times. We selected Longji Green Energy, Tongwei Co., Ltd., and Jingao Technology as comparable companies, and determined that the industry's 24-year average valuation was 30 times PE. Considering that the company is the leader in photovoltaic modules, the N-type TopCon module shipment volume is the first in the market, the leading edge is obvious, and the industry has plenty of room for growth after breaking out of the trough period, we gave the company a 24-year average valuation of the industry and maintained the company's “gain” rating.
Risk warning: Global PV installations fall short of expectations, N-type technology progress falls short of expectations, and competition in the industrial chain intensifies.