24H1 revenue/profit continues to grow, focus on 0BB progress
2024H1 expects to achieve revenue of 39.99-4451 million yuan (year-on-year increase of 58.84%-76.80%), and net profit to mother of 692-772 million yuan (year-on-year increase of 32.53% -47.82%). We expect net profit to be 19.98/25.37/3,024 billion yuan respectively in 2024-2026; comparable to the company's 24-year Wind, the average PE value is 11 times. Considering the rapid progress of the company's new businesses such as photovoltaic 0BB string welders and semiconductors, the corresponding target price is 69.85 yuan (previous value of 133.65 yuan, prior value of 95.25 yuan), maintaining the “buy” rating.
24Q2 revenue/profit continued to grow, and revenue recognition may be affected by a decline in downstream profits. Looking at a limited quarterly basis, 2024Q2 is expected to achieve revenue of 20.34-2,486 billion yuan (up 37.60%-68.18% year over year), and net profit to mother is expected to be 360-440 million yuan (up 19.38%-45.91% year over year). 2024Q2 expects revenue growth of 3.57%-26.58% month-on-month, and net profit to mother of 8.06%-32.08% month-on-month. Considering that PV equipment takes about 1 year from order signing to revenue confirmation, the company's 2023H1 new orders were +76.76% year over year, and the company's 2024H1 revenue increased by about 58.84%-76.80% year on year. The growth rate center was 67.82%, close to the 23H1 new order growth rate. The upper limit of the growth rate was slightly higher than the 23H1 new order growth rate. Considering factors such as the decline in profits of the company's downstream silicon wafer/battery/module companies in 2024, the market is concerned that equipment vendor revenue confirmation is at risk of slowing down. Judging from the company's 24H1 revenue growth rate, it is limited by the decline in downstream profits.
The net interest rate for 24Q2 improved month-on-month. We believe that the effect of the new PV business scale reflects that the 2024H1 net profit margin is expected to be 17.32%-17.35%, down 3.40-3.44pct from the previous year; the net profit margin for 2024Q2 is expected to be 17.68%, down 2.70 pcts year on year, and the net profit margin to mother increased 0.74 pct month-on-month. We believe that the year-on-year decline in the company's profitability continued the Q1 product structure change, that is, the company's new products such as monocrystalline furnaces, screen printing line equipment, etc. gradually confirmed revenue, and the gross margin of this portion was low. However, the company's net profit margin improved in 24Q2. We believe it is mainly reflected in the scale effect of the company's new business such as single crystal furnaces and battery equipment, which has led to an increase in the gross margin of this part of the business.
A number of SNEC companies announced 0BB products. Following the technical reform and replacement of 0BB equipment, companies including Yidao, Jingao, and Zhengtai announced their 0BB component products. In addition, companies such as Jingke, Tongwei, and Risheng all introduced or laid out 0BB component packaging technology. 0BB technology can reduce battery silver paste costs and increase module output power. It is an important technology for photovoltaic cell modules such as TopCon and HJT to improve product cost performance. Altway TopCon 0BB technology reduces single-chip battery silver consumption by ≥ 10%, increases module power by ≥5W, and can modify existing equipment to relieve downstream cash flow pressure. We believe that the company's orders are expected to continue to grow as 0BB technology advances and further platformization of its own business.
Risk warning: The company's new product development falls short of expectations, industry competition intensifies, and iterative stringing technology expectations are low.