Core views

The company released a semi-annual performance forecast for 2024. The net profit loss for the first half of 2024 is 4.8-5.5 billion yuan, a year-on-year decrease of 152%-160%; the net profit loss after deduction is 4.839-5.539 billion yuan, a year-on-year decrease of 153%-161%. The pressure on the company's performance is mainly due to the overall mismatch between supply and demand in the photovoltaic industry, a sharp drop in sales prices for major products in various sectors, and a decline in investment income from participating silicon companies. ① ② The company expects to accrue inventory impairment amounts of 4.5 billion yuan to 4.8 billion yuan, which will have a significant negative impact on performance. The company's new products have excellent performance and are expected to be delivered in batches in the fourth quarter.

occurrences

The company released the 2024 semi-annual results forecast

The company expects a loss of 4.8-5.5 billion yuan in net profit to mother in the first half of 2024, a year-on-year decrease of 152%-160%; the net profit loss after deduction is 4.839-5.539 billion yuan, a year-on-year decrease of 153%-161%. According to the median forecast, Q2 company's net profit to mother was 2.8 billion, a year-on-year decrease of 151%; net profit after deduction was 2.77 billion yuan, a year-on-year decrease of 151%.

Brief review

Affected by industrial chain prices and inventory depreciation, the Q2 company's performance was pressured by the median forecast. In the second quarter, the company's net profit loss to mother was 2.8 billion, down 151% year on year; net profit loss after deduction was 2.77 billion yuan, down 151% year on year. The company's second-quarter results were mainly under pressure ① due to the mismatch between overall supply and demand in the photovoltaic industry, a sharp drop in market sales prices for major products in various sectors, and a decline in investment income from participating silicon companies. ② The company expects to accrue inventory impairment amounts of 4.5 billion yuan to 4.8 billion yuan, which will have a significant negative impact on performance.

With the in-depth layout of BC technology, the new products are expected to be delivered in batches in the fourth quarter. In the first half of the year, the company launched a new Hi-Mo 9 product based on HPBC 2.0 battery technology, equipped with high-quality Terry N silicon wafers and advanced passivation technology. The module power is as high as 660W and the conversion efficiency is as high as 24.43%. The company will accelerate batch supply of new products starting in the fourth quarter of this year, and work together to build long-term sustainable competitiveness.

The amount of cash on hand is sufficient to provide a foundation for subsequent BC production expansion

The company currently has a relatively leading position in the industry in cash on hand, providing a foundation for subsequent BC production expansion. As of the end of the first quarter of 2024, the company's monetary capital was $57.314 billion. According to the company's announcement, the company's BC production capacity is expected to reach 70 GW by the end of 25, with production capacity of first-generation products of about 20 GW and production capacity of second-generation products of about 50 GW.

Profit forecast: We expect the company's 2024-2026 net profit to be 0.53/3.39/4.65 billion yuan, and the 2025-2026 PE valuation corresponding to July 10, 2024 will be 31.7/23.1 times. Increased competition in the industry in 2024 led to a decline in industrial chain prices, putting pressure on the company's performance. It is expected that the industry may gradually clear up in 2025. As BC's technology-leading integrated leader, profits are expected to recover and maintain an “gain” rating.

Risk analysis

1. The risk that industry demand falls short of expectations. The company's business covers many links in the photovoltaic industry chain. If the industry's growth rate falls short of expectations, it will have a major negative impact on the company's photovoltaic module, silicon wafer, power plants, and contract processing businesses.

2. HPBC's efficiency improvement and cost reduction fell short of expectations. HPBC is one of the company's differentiating products and has certain advantages in terms of profitability. If the company's HPBC efficiency improvement and cost reduction fall short of expectations, then the company's profitability and product competitiveness will be adversely affected.

3. The risk that the project progress falls short of expectations. The company has many production expansion projects, and after the integrated production capacity is put into operation, it will bring a certain increase in the profit of the company's integrated components. If the progress of the company's projects falls short of expectations, then the company's shipment volume and profitability will be greatly affected.