A leading string inverter company, the global layout is blossoming more and more. According to the company's 2023 annual report, since its establishment, the company has focused on the distributed photovoltaic field, mainly engaged in R&D, production, sales and service of string inverters. In 2023, the company's grid-connected/energy storage inverters accounted for 66.6%/7.2% of the revenue. According to Jibang New Energy's official account, quoting Wood Mackenzie data, the company ranked 3rd with an 8% share of the global inverter market in 2022. The company is one of the first domestic string-connected inverter companies to enter the international market. The company adheres to the global layout strategy of “Jinlang Technology” and “SOLIS” independent brands at home and abroad, actively explores core markets such as the United Kingdom, the Netherlands, Australia, Mexico, India, and the United States, and promotes the construction of localized sales and service networks. The brand enjoys high popularity and reputation in the industry.
Inverters are affected by inventory removal, and performance is under pressure in the short term, and a month-on-month growth trend in full-year performance can be expected. According to the company's 2023 semi-annual report and annual report, in 2023, the company's grid-connected/energy storage inverter revenue was 4,06/440 million yuan, year-on-year change +1.5%/-58.9%, gross profit margin 21.6%/37.1%, year-on-year change -5.8pct/+2.8pct. Looking at the first half of the year, 23H1/H2, the company's grid-connected inverter revenue was 2.23/1.84 billion yuan, gross profit margin 28%/13.8%, energy storage inverter revenue of 31/130 million yuan, gross profit margin 40.1%/29.6%. Since the second half of this year, it has been affected by inventory removal in Europe, and the company's inverter shipments and profitability have been phased. It is expected that after 24 years, with the growth of emerging markets and the bottom of European inventory removal, overseas shipments will improve quarterly, and net interest rates will also be drastically restored due to the scale effect. We are optimistic about the month-on-month growth trend in annual performance.
The distributed power generation business is growing rapidly, and high-margin business effectively supports profits. In 2023, the company's household photovoltaic power generation system revenue was 1.19 billion yuan, up 106.2% year on year, accounting for 19.6% of total revenue, making it the company's second-largest main business, with a gross profit margin of 59.9%. Since April 2019, the company has established a wholly-owned subsidiary, Jinlang Smart, to develop, invest, operate and maintain distributed photovoltaic power plants. As of December 31, 2023, the company's distributed photovoltaic power plants had a cumulative grid-connected installed capacity of 1186.71 MW, and it already has mature one-stop solution capabilities for new energy power production business.
Promulgate the “Double Improvement of Quality and Return” plan to protect the interests of all shareholders. In February 2024, the company announced the “Double Improvement of Quality and Return” action plan, insisting on stabilizing cash dividends. Since listing in March 2019, the company has implemented cash dividends for four consecutive years, with a cumulative cash dividend of 501 million yuan. The total amount of cash dividends accounts for 25.31% of the cumulative net profit for the period. Based on confidence in the company's future development, the company repurchased shares through centralized bidding transactions. As of January 31, 2024, the company had repurchased a total of 688,500 shares, accounting for 0.17% of the company's total share capital, and a total transaction amount of 49.628 million yuan (not including transaction fees).
Profit forecasting and valuation. We expect the company's net profit to be 962, 13.58, and 1,763 billion yuan respectively in 24-26, up 23.4%, 41.2%, and 29.8% year-on-year. The company was given a PE valuation of 30-31 times in 2024, corresponding to a reasonable value range of 72.00-74.40 yuan, and given a “superior to the market” rating.
Risk warning. New PV installations fell short of expectations, industry inventories fell short of expectations, and industry competition intensified.