Description of the event
1) Tongwei Co., Ltd. released its 2023 annual report & 2024 quarterly report. In 2023, the company achieved revenue of 139.104 billion yuan, a year-on-year decrease of 2.33%; net profit to mother of 13.574 billion yuan, a year-on-year decrease of 47.25%; 2023Q4 achieved revenue of 27.684 billion yuan, a year-on-year decrease of 31.37%, a year-on-year decrease of 25.89%; net profit to mother of 2,728 billion yuan, mainly affected by impairment, achieved revenue of 19.570 billion yuan in 2024Q1, a year-on-year decrease of 41.13%. 100 million yuan.
2) The company plans to distribute a cash dividend of 9.05 yuan (tax included) to all shareholders for every 10 shares. It is estimated that a total cash dividend of 4,074 billion yuan will be distributed, accounting for 30.02% of net profit due to mother in 2023. The company continues to maintain a high dividend ratio. In 2024-2026, according to the company's development stage and capital expenditure schedule, the minimum dividend ratio should reach 20%-80%.
3) The company plans to repurchase 2-4 billion yuan for employee shareholding or equity incentives. The repurchase price is not higher than 36 yuan/share.
Incident comments
2023:1) Silicon materials business, the company's leading position is stable. The company achieved sales volume of 387,200 tons, +50.79%, and the company's global market share exceeds 25%. Thanks to excellent product quality and cost control capabilities and stable supply chain partnerships, the company's high-purity silicon business still achieved a net profit of more than 45,000 yuan per ton despite the sharp drop in product prices in 2023. 2) In the battery business, the company continues to rank first in the world in solar cell shipments. In 2023, the battery sales volume was 80.66 GW (including personal use), +68.11% compared to the same period last year. 3) Component business. The company's components achieved the target set at the beginning of the year, achieved 31.11 GW of module sales throughout the year, +292.08% over the same period last year, and the shipment volume entered the top five in the world. 4) Other business: In terms of power plants, the company continues to focus on the development and construction of large-scale “Yuguang Integrated” bases. By the end of 2023, the company had 54 “Yuguang Integrated” photovoltaic power plants, with a cumulative installed capacity of 4.07 GW, and a total annual settlement capacity of 4.432 billion kilowatts. In terms of feed business, the company achieved total feed sales volume of 7.413,400 tons throughout the year, +3.05% year-on-year, with a gross margin of 7.81%, which remained stable. 5) Financial aspects: The total amount of impairment preparations calculated by the company in 2023 was 6.365 billion yuan, of which 4.730 billion yuan was prepared for impairment of fixed assets and technical improvement projects. Mainly, production capacity impairment of PERC assets has already been calculated, and inventory prices have dropped by 1.305 billion yuan.
Looking ahead, 1) In the silicon business, total shipments in 2023 are expected to reach 550,000 tons, and the leading position in silicon is stable. In 2023, the company's production cost has reached less than 42,000 yuan/ton. As electricity prices return to normal during the flood season in Leshan and new production capacity is gradually put into operation, there is room for the company's average cost of silicon materials to be further reduced. At present, the company's N-type products account for more than 90% of the monthly output, and the product quality guarantees the company's sales price. 2) In the battery business, the company plans to gradually complete the transformation of about 38 GW perc production capacity in 2024, and add 16 and 25 GW TopCon battery production capacity in Meishan and Shuangliu. In 2024, the company's TopCon battery production capacity will exceed 100 GW, and the battery shipment scale is expected to be around 90 GW. Currently, the supply and demand for N-type batteries is optimal in the main industry chain, and TopCon batteries are still profitable. As the company's TopCon share gradually increases, profits are expected to gradually recover. 3) In the component business, the company's shipments are expected to reach more than 50 GW in 24 years, helping the company expand in an integrated manner.
We expect the company to achieve net profit of 3.5 billion dollars in 2024.
Risk warning
1. Deterioration of the competitive landscape;
2. PV installation falls short of expectations.