Key points of investment
N-type component leader, continuously improving integration and global layout. The company has been engaged in the production of photovoltaic modules, cells and silicon wafers for nearly 20 years, and has established a vertically integrated production capacity from rod and ingot to photovoltaic module production. Balance the global market, seize opportunities in emerging markets, and respond positively to overseas policies.
The company's 2024Q1 revenue was 23.084 billion yuan, down -0.3%; net profit to mother was 1,176 billion yuan, down 29% from the same period. Net profit after deducting non-return to mother was 191 million yuan, down 84% from the same period.
Market profits are clearly divided, and the shipping ranking is still at the top. The company shipped about 20 GW of components in 2024Q1, an increase of 51%, a decrease of 23%, and the average order price was 1.1 yuan/W (excluding tax). Of these, the US shipped about 1.5 GW. The Middle East and North Africa were also profitable markets, and both domestic Europe and the Asia-Pacific region lost money at low prices. 2024Q2's production schedule increased by 20% +. It is expected to ship 100-110GW in 2024. The order coverage rate has exceeded 70%, and the US is expected to ship 8GW and Model N to account for 90%.
Prudently expand production capacity and continue to iterate technology. The company's silicon wafer/battery/module production capacity was 85/90/110 GW at the end of 2023; the company carefully expanded production capacity, maintaining only 14 GW of production expansion in the first and second phases of the Shanxi integration. The recent fire had an impact on chip and cell production capacity, and is expected to complete the climb by the end of the year; the US 2GW module was put into operation in 2024Q1. TopCon's efficiency continued to improve. At the end of 23, mass production efficiency reached 25.8%, LECO and other technologies were further introduced to 26.5% in 24, and 27% + in 25, and continued to lead the industry in efficiency.
Profit forecast and investment rating: Based on increased competition in the industry and profit pressure on the entire industry chain, we lowered the company's profit forecast for 2024-2025 and added a profit forecast for 2026. We expect net profit from 2024-2026 to 42/60/86 billion yuan (the previous value was 61.77 billion yuan), -44%/+44%/+43% year-on-year, corresponding to the current PE 19/13/9 times. Considering the company's leading position in integrated components, and TopCon's efficiency continues to lead the industry, we maintain a “buy” rating.
Risk warning: Policies fall short of expectations, and competition intensifies.