A leading company in photovoltaic equipment, actively expanding into the field of semiconductor equipment. The company was founded in 2003 and is a high-tech enterprise mainly engaged in R&D, manufacturing and sales of solar photovoltaic cell equipment. The company has a comprehensive layout of TopCon, HJT, XBC, and perovskite solar cell equipment to provide efficient solar cell equipment and intelligent manufacturing system solutions. At the same time, the company followed the development path of photovoltaic equipment products and extended to the semiconductor equipment field.

The company disclosed its Q3 2014 quarterly report, and revenue and performance grew rapidly. The company's revenue for 2024Q1-Q3 was 12.344 billion yuan, +92.72% year on year, net profit to mother was 2.023 billion yuan, +65.45% year on year, 24Q3 revenue was 5.722 billion yuan, +146.41% year over year, and net profit to mother was 0.797 billion yuan, +69.10% year over year.

Short-term profitability fluctuates, and the rate of expenses is well controlled during the period. 2024Q1-Q3's gross margin and net margin were 27.80%/16.39%, with year-on-year changes of -0.09/-2.77pct; among them, the 24Q3 single quarter gross margin/net margin was 23.38%/13.92%, respectively, and -7.05pct/-6.57pct year-on-year, respectively. The cost rate during 2024Q1-Q3 was 6.31%, a year-on-year change of -0.93pct. Among them, the sales/management/finance/R&D expense ratios were 2.21%/1.19%/-0.51%/3.42%, respectively, with a year-on-year change of +0.34/ -0.46/+1.67/-2.48pct. Among them, the cost rate for the 24Q3 period was 5.69%, a year-on-year change of -3.88pct. Among them, the sales/management/finance/R&D expense ratios were 2.17%/1.08%/0.14%/2.30%, respectively, with a year-on-year change of +0.12/-0.94/+1.62/-4.68pct.

The company's contract liabilities remained flat year over year, and cash flow continued to grow. As of 2024Q3, the company's contract debt was 16.46 billion yuan, +0.34% year-on-year. The company's inventory was 18.076 billion yuan, -0.18% YoY. In terms of cash flow, operating cash flow for the 24Q3 quarter was 1.705 billion yuan, +52.70% year-on-year.

There are multiple equipment and technology routes, and we are actively building a technology platform company. (1) On the TopCon side, the company continues to maintain its leading market share, and the tubular PE-POLY equipment launched has become the mainstream technology route of TopCon; (2) On the HJT side, the average conversion efficiency of HJT cells on the company's pilot line reached 25.6% (ISFH standard), and the company's large-chamber RF double-sided microcrystalline technology was fully mass-produced; (3) In terms of perovskite, the company successfully shipped large-scale coating and VCD equipment to downstream customers, the first GW grade magnetron vertical vacuum sputtering equipment to the leading company. Mines The pilot line was officially put into operation; (4) In the semiconductor field, the subsidiary Chuangwei Microelectronics won the bid for wet equipment for the entire silicon carbide line. 6/8 inch trough and single-piece fully automatic wet etching and cleaning equipment covered the entire etching and cleaning process of silicon carbide devices. At the same time, the company's semiconductor wet equipment actively exploited the Eurasian market and continuously received orders; (5) In terms of composite fluid collection, the company's self-developed double-sided coiled copper foil sputtering coating equipment successfully went offline. Also, in August '24, we successfully delivered one-step composite fluid collector vacuum wound aluminum foil coating equipment to the customer.

Profit forecast and valuation: The company is expected to achieve net profit of 2.619/3.26/3.68 billion yuan in 2024/2025/2026. Comparable companies forecast an average PE valuation value of 14.82 times in 2024. We gave the company a PE valuation of 13-16 times in 2024, with a reasonable value range of 97.91-120.50 yuan/share (estimated EPS of 7.53 yuan in 2024), predicted that the company would achieve net profit of 2.619 billion yuan to mother in 2024, and a reasonable market value range of 34.044-41.9 billion yuan, giving it a “superior to the market” rating.

Risk warning: PV cell production expansion falls short of expectations, battery technology cost reduction falls short of expectations, downstream demand growth falls short of expectations, etc.