Performance reviews:
The company announced its 2023 & 24Q1 results announcement. Net profit for the full year of 2023 was 139.1 billion yuan, net profit to mother of 13.57 billion yuan, or -47.2% year on year; net profit after deducting non-return to mother of 13.61 billion yuan, -48.7% year on year; 24Q1 achieved revenue of 19.57 billion yuan, 41.1% year over year, net profit attributable to mother of 786 million yuan, net profit of non-return to mother of 790 million yuan. At the same time, the company announced that it plans to use its own capital of 2-4 billion yuan to repurchase the company's shares for employee stock ownership plans or equity incentives, demonstrating the company's long-term business confidence.
The dual advantages of silicon material quality and cost are highlighted. Advanced production capacity was further expanded. The company shipped 387,200 tons of polysilicon in '23 (+50.79%), and the average production cost fell below 42,000 yuan/ton (net profit per ton exceeding 45,000 yuan/ton), leading the industry average. Currently, the company's N-type products account for more than 90% of the monthly output, and 1000 tons/year of electronic polysilicon products that can be used in the semiconductor industry have successfully passed verification by domestic and foreign customers and achieved overseas supply; by the end of 23, the company's polycrystalline silicon production capacity had been successfully verified by domestic and foreign customers and achieved overseas supply. 450,000 tons. With the construction and implementation of the 200,000 ton high purity silicon projects in Yunnan and 200,000 tons in Inner Mongolia using the eighth-generation “Yongxiang Method”, the company's polysilicon production capacity will reach 850,000 tons. Among them, the Yunnan project will be put into operation in 24Q2 as the world's first 200,000 ton project, and the 200,000 ton project in Inner Mongolia will be put into operation in 24Q3. 24Q1 shipped about 105,000 tons of polysilicon and achieved a profit of about 8,500 yuan/ton per ton against the backdrop of falling polysilicon prices and rising electricity prices.
Multiple technology routes are being developed in parallel, and TNC's advanced production capacity advantage highlights the company's 23-year battery sales volume of 80.66 GW (including personal use), +68.11%; the average conversion efficiency of the company's latest mass production of TNC batteries reached 26.26%, and the non-silicon cost has now been reduced to about 0.16 yuan/w. Compared with traditional PERC double-sided modules, its component products have increased power by more than 30W, and the single-watt power generation gain increased by 3-5%. By the end of 23, the company's battery production capacity reached 95 GW. As the company promotes the upgrading of existing PERC production capacity and the construction of new TNC production capacity, it is expected to gradually complete about 38 GW PERC capacity transformation within 24 years (the remaining unmodifiable PERC production capacity has completed all impairment charges), and increased 16 GW and 25 GW TNC battery production capacity at Meishan and Shuangliu bases respectively. It is expected that by the end of 24, the company's TNC production capacity will exceed 100GW, accounting for about 80% of the total battery production capacity. At the same time, in developing new battery technology, the company adopted multiple technology routes and parallel R&D ideas. Currently, the company's THC (HJT) pilot line has successfully introduced cost reduction solutions such as 110 micron thin silicon wafers, low humidity heavy silver coated copper paste, and 0BB technology, and is simultaneously seeking differentiated breakthroughs in copper interconnection technology, making positive progress in graphics, metallization, and product reliability. In addition, the company has also achieved phased R&D results in cutting-edge technologies such as back-contact batteries and perovskite/silicon laminated batteries.
Component shipments entered the top five in the world. Diversified component technology formed a product matrix. The company sold 31.11 GW of modules in 23 years, +292.08% over the same period last year. According to InfoLink data, shipments entered the top five in the world. By the end of '23, the company's component production capacity had reached 75GW. The company relied on digitalization, informatization, intelligent production line construction and comprehensive quality management systems to achieve component production and operation efficiency and product quality control capabilities at the first-line level of the industry. In addition, the company has built a rich product matrix that includes differentiated battery technology routes such as TPC, TNC, THC, etc., and diverse module technologies, which is expected to meet the increasingly rich application scenarios of photovoltaic installations around the world and the needs of end customers for higher power module products.
Profit forecasting and investment advice
According to the latest price and increasing competition factors in the industry chain, we lowered the company's 2024-2025 net profit forecast to 2.97 billion yuan (previous value: RMB 181 billion, down 84%) and 6.16 billion yuan (previous value: RMB 211 billion, down 71%); added a 2026 forecast of RMB 9.15 billion. The current stock price corresponding to 2024-2026 PE is 33.2, 16.0, and 10.8 times, respectively. Based on the company's strong financial strength and excellent comprehensive operating capabilities, we are expected to use quality and cost advantages to overcome this cycle, and we maintain the “buy” rating for the company.
Risk warning
Global PV demand growth falls short of expectations; silicon prices fall beyond expectations; risk of international trade friction; risk of capacity construction falling short of expectations.