2024Q3 companies are picking up in terms of profitability. According to the company's three-quarter report in 2024Q3, the company achieved operating income of 20.064 billion yuan, a year-on-year decrease of 31.87% and a month-on-month decrease of 3.79%, resulting in a decrease in product prices; net profit to mother was -1.261 billion yuan, down 150.14% year on year, and losses narrowed significantly from month to month, mainly due to reduced asset impairment losses.

Shipments of silicon wafers and components increased month-on-month in 24Q3, steadily advancing BC production capacity. According to the investor relations activity record released on November 1, the company shipped 82.80 GW of silicon wafers and 55.39 GW of battery modules in the first three quarters; of these, the third quarter were 38.37 GW and 21.39 GW, respectively, with year-on-month increases. According to the company's semi-annual report, HPBC2.0 products will be launched on a large scale by the end of 2024. By the end of 2025, BC battery production capacity will reach 70 GW, of which HPBC 2.0 production capacity is about 50 GW, and all domestic battery bases are planned to move to BC products by the end of 2026; the 2024H1 has achieved smooth customs clearance in North America, and the US 5GW component factory has been officially put into operation, forming strong support for business development in North America.

Focusing on BC technology innovation, HPBC2.0 products have significant advantages. According to the company's three-quarter report, the company is firmly leading in the BC battery field and has made key progress in HPBC 2.0 technology, with battery mass production efficiency of 26.6%; based on high-quality Terry silicon wafers and HPBC 2.0 battery technology, the latest BC second-generation component products such as Hi-MO 9 and Hi-Mo X10 have a maximum efficiency of 24.8%, making them the most efficient products that can be mass-produced on a large scale in the entire industry. According to the investor relations activity record released on November 1, the company accelerated the market penetration rate of BC batteries, with the goal of reaching 30 GW of shipments by 2025, and clarified that the gross margin target for BC battery products is 10% higher than that of existing TopCon products; BC modules have shown significant differentiating advantages in the distributed photovoltaic market, such as preventing the formation of hot spots and improving overall product aesthetics, increasing the attractiveness and premium space of the product. We believe that this dual drive of technology and the market is expected to significantly enhance the profitability of BC's battery business and become an important growth point for future performance.

Profit forecast and rating: We expect the company's net profit to be -7.627, 5.266, and 7.14 billion yuan respectively in 24-26, with year-on-year increases of -170.9%, 169%, and 35.6%. As a leader in the global photovoltaic industry, the company was rated “superior to the market” by referring to comparable companies, with a valuation of 32 to 35 times in 2025, corresponding to a reasonable value range of 22.08 to 24.15 yuan.

Risk warning: risk of failure to develop new markets, risk of fluctuating raw materials and energy prices.