Incident: The company released its 2022 annual report and 23Q1 performance forecast on April 13, 2023. In 2022, the company achieved operating income of 9.236 billion yuan, an increase of 31.44% over the previous year; net profit of 1,387 million yuan, an increase of 16.60%; net profit of the non-return mother of 1,294 million yuan, an increase of 20.84% over the previous year; basic EPS of 0.4099 yuan; and a proposed cash dividend of 0.128 yuan/share (tax included). In 23Q1, the company expects to achieve net profit of 3.7-4.1/35—39 billion yuan after deducting non-return to the mother, an increase of 41.48-56.78%/35.79-51.31%; basic EPS of 0.0946-0.1049 yuan.
Comment: The structure has changed significantly, and the CFO is growing rapidly. In 2022, the company's electricity/manufacturing sector achieved revenue of 43.56/4,857 billion yuan (-2.34%/+90.57%), accounting for 47.16%/52.58% (+16.26/-16.25pcts), and gross profit margin of 64.93%/4.42% (-0.27/+2.66pcts). Mainly due to major changes in the product structure, the company's gross profit margin was 32.77% (-8.9pcts), sales expenses ratio 0.58% (+0.1pct), and R&D expenses ratio 2.52% (+0.85pct). It mainly benefited from factors such as issuing stocks, 1 billion yuan of green corporate bonds, and accelerated distribution of subsidies. The company's financial expenses were 823 million yuan (-16.48%), the financial expenses ratio of 8.91% (-5.11pcts), the period fee ratio 14.75% (-1.19pcts), the CFO 5.099 billion (+148.13%), and the balance ratio of 53.04% (-9.47pcts).
Installed capacity continues to grow, and subsidies are being distributed at an accelerated pace. At the end of 2022, the company operated about 4.347 GW of power plants, 1.784 GW of power plants under construction, and 2.807 GW of power plants to be built or purchased, totaling about 8.938 GW, an increase of 77/1084/1687/2848MW respectively, and plans to add 3 GW this year. Last year, the company received 3.626 billion yuan in subsidies, of which China subsidized 3,501 billion yuan (+167.05%), and at the end of the year there were 9.744 billion yuan in subsidies (national subsidies accounted for 95.38%). It is expected that as subsidies are distributed faster, the company's cash flow will continue to improve and installed capacity is expected to accelerate growth.
Manufacturing capacity has been released, and losses have narrowed drastically. The company currently has a production capacity of 1.5 GW of photovoltaic cells and a production capacity of 3.5 GW of photovoltaic modules, mainly benefiting from the commissioning of 1.5 GW modules in August last year. Production and sales in the manufacturing sector increased 50.48%/50.30% year on year, gross margin increased 2.66 pcts year on year, and the loss of Zhenjiang Company narrowed sharply to 36 million yuan (+68.59%). It is expected that as silicon prices continue to decline this year, the production, sales volume and profitability of the company's manufacturing sector are expected to increase further, or turn a loss into a win.
Profit forecast: In 2023-2025, the company's revenue is estimated to be 106.19/131.25/16,132 billion yuan, net profit of 1,88/27.22/3,537 billion yuan, EPS of 0.48/0.70/0.90 yuan, corresponding to PE14.62/10.07/7.75 times, maintaining the “buy” rating.
Risk warning: PV installed capacity growth fell short of expectations, and profits in the manufacturing sector fell short of expectations.