The company released the 2023 annual report and the 2024 quarterly report, with profit of +153%/-29%, respectively; the company's component shipments increased rapidly, and high-quality integrated production capacity created a leading barrier; and maintained an increase in holdings rating.
Key points to support ratings
The company's performance in 2023 increased by 153.41% year on year: the company released its 2023 annual report and achieved annual revenue of 118.682 billion yuan, an increase of 43.55%; achieved profit of 7.440 billion yuan, an increase of 153.20% year on year; after deducting non-profit, 6.904 billion yuan, an increase of 152.09% year on year. Based on annual report data, 2023Q4 achieved profit of 1,086 billion yuan, a year-on-year decrease of 13.97% and a year-on-month decrease of 56.75%.
The company's performance in the first quarter of 2024 decreased 29.09% year on year: the company released its 2024 quarterly report, and achieved revenue of 23.084 billion yuan in the first quarter, a decrease of 0.3% year on year; realized profit of 1,176 billion yuan, a decrease of 29.09% year on year, and an increase of 8.24% month on month.
There was a high increase in module shipments, and the N-type module leader benefited from new technology emissions: in 2023, the company shipped 78.52 GW of photovoltaic modules, an increase of 77% over the previous year. According to Infolink Consulting data, the company shipped the world's largest module shipment in 2023. As a leading company of N-type components, the company achieved 48.41 GW of N-type module shipments in 2023, an increase of 352% over the previous year, accounting for about 62% of the company's total shipments in 2023. The advantages of new technology have driven the company's volume profit. In 2023, the company's photovoltaic module business achieved revenue of 114.383 billion yuan, an increase of 43.33% over the previous year, and achieved a gross profit margin of 14.43%, an increase of 3.82 percentage points over the previous year.
High-quality integrated production capacity builds a leading barrier: By the end of 2023, the company's production capacity for silicon wafers, batteries and modules was 85 GW, 90 GW, and 110 GW respectively, with an integrated production capacity supporting rate of more than 85%; this includes the industry's largest overseas integrated production capacity of more than 12 GW of silicon wafers, batteries and modules. According to the announcement, the company aims to ship 100-110GW of components by 2024, with the N type accounting for 90% of the target.
The company is actively promoting a 56GW vertical integration base in Shanxi and 2GW of US module production capacity. The goal is to build 120GW silicon wafers, 110GW batteries, and 130GW modules by the end of 2024, of which the N-type production capacity exceeds 100GW.
Depreciation pressure is relatively manageable: in 2023, the company accrued asset impairment losses of 1,324 million yuan, including fixed asset impairment and inventory depreciation losses of 642 million yuan and 657 million yuan respectively; in the first quarter of 2024, the company accrued asset impairment losses of 150 million yuan, and the company's depreciation pressure was relatively manageable.
valuations
Based on current industry chain prices, the company's current production capacity and shipping targets, we adjusted the company's 2024-2026 earnings forecast to 0.45/0.62/0.81 yuan (the original 2024-2026 forecast was 0.94/1.16/- yuan), corresponding to a price-earnings ratio of 17.1/12.5/9.5 times; maintaining an increase in holdings rating.
The main risks faced by ratings
Policies fall short of expectations; raw material costs fall short of expectations; price competition exceeds expectations; risk of international trade friction; risk of technology iteration.