Key points of investment

Continuing to increase R&D investment and technological innovation, product strength drove performance growth. In 2023, the company achieved operating income of 7.353 billion yuan, an increase of 56.10% over the previous year, and achieved net profit of 852 million yuan, an increase of 31.24% over the previous year. Achieved a gross profit margin of 30.76%, a year-on-year decrease of 1.70pct, a net profit margin of 11.78%, and a year-on-year decrease of 1.73 pct. With 2024Q1, the company achieved operating income of 1,126 billion yuan, a year-on-year decrease of 34.50%, achieved net profit of -29 million yuan, a year-on-year decrease of 108.57%, achieved a gross profit margin of 27.47%, an increase of 7.91 pcts over the previous month, achieved a net profit margin of -1.70%, and an increase of 0.2 pct over the previous year. The company continues to optimize supply chain management, while increasing R&D investment and technological innovation to maintain product competitiveness and achieve steady growth in operating income and grid-connected inverter shipments.

The global layout was further accelerated. Sales of inverters and energy storage batteries grew rapidly in 2023. The company's inverter sales volume was about 686,300 units, of which 1) grid-connected inverters sold about 532,200 units, accounting for about 77.54%, up 15.4% year on year; 2) sales volume of energy storage inverters was about 154,400 units, accounting for about 22.46%, down 32.2% year on year. The company continued to expand the domestic and overseas markets of photovoltaic products, and products were sold in batches to many countries and regions around the world, such as Germany, the Netherlands, and Australia. In addition, in 2023, the company's energy storage battery sales volume was about 341.15 MWH, and domestic household distributed system sales volume was about 513.28 MW.

Deeply cultivate the field of energy storage and continue to build product competitiveness

In 2023, the company successively released the UT series and GT series of new grid-connected inverters that can be applied to ground-based power stations and industrial and commercial scenarios. The UT series uses advanced topology and innovative inverter control technology, and the maximum conversion efficiency is as high as 99.01%. This series can adapt to complex terrain to increase power generation, and is compatible with 182 and 210 series components. The whole machine can adapt to various harsh environments, and is equipped with a DC release switch, intelligent heat dissipation, safer and longer life. The GT series, on the other hand, uses a new silver appearance and has an ultra-high power density. The large tonnage integrated die-casting reduces the size by 20%, the weight is reduced by 15%, and the maximum conversion efficiency is as high as 99%. As of December 31, 2023, the company has 426 authorized intellectual property rights.

Profit forecasting and valuation

The profit forecast was lowered and the “buy” rating was maintained. The company is a leading domestic manufacturer of inverters, and continues to invest in R&D to create a competitive advantage for its products. Considering that energy storage shipments are affected by various factors such as inventory, we lowered the company's profit forecast for 2024-2025 and added a profit forecast for 2026. It is estimated that the company's net profit for 2024-2026 will be 762, 9.17, and 1,162 million yuan, respectively, corresponding to EPS of 4.41, 5.30, and 6.72 yuan, respectively, and PE 24, 20, and 16 times, respectively.

Risk warning: fluctuations in raw material prices, fluctuations in foreign exchange, fluctuations in the company's gross margin.