As a veteran photovoltaic enterprise, we are optimistic about its development after its return to A listing, and believe that it is expected to grow into a leading enterprise in photostorage system solutions. The main points are: 1) with the deep accumulation of overseas channels and brands and the perfect layout of the global supply chain system, it is expected to fully enjoy the overseas premium and promote the continuous improvement of profitability. 2) the integration rate continues to improve, the production capacity and quality continues to improve, to ensure the company's product leadership, while consolidating the cost advantage. 3) Energy storage has obvious advantages of first-mover, with the accumulation of technology and products, which is expected to become another growth point of the company. 4) after listing, the financing capacity is improved, the stack scale is further expanded, and the expense rate is expected to decrease.

Deep overseas channels and good profitability

At present, the photovoltaic main industry chain has been fully expected for overcapacity, and the profit flow after the falling price of silicon has become one of the most concerned issues in the market. We expect that under the background of technological change, product change and market structure change, the follow-up profitability of integrated enterprises is expected to remain good, especially the impact of market structure on component prices and profitability will become more obvious. For Ates, with its perfect global sales network and supply chain system, longer-term brand building and higher overseas share, especially the advantages of high-end markets such as the United States and Japan, it is expected to fully enjoy the overseas premium and drive profitability to continue to improve.

Expand advanced production capacity and improve the rate of integration

Historically, Ates's capacity structure has been pyramidal and vertically less integrated than its peers, putting pressure on the company's profitability during a period of rapidly rising silicon prices in 2021. From 2022, the company began to adjust its strategic layout to improve the integrated rate of silicon wafers and batteries. In terms of silicon rods / ingots, the company's integrated production capacity increased from 22.59% in 2021 to 63.35% in 2022, and basically remained at the level of 60% and 70%. In the battery sector, the company pays close attention to the time window of N-type change to expand production capacity, enhance the integration rate, and improve the overall capacity quality. In terms of new technology, the company's TOPCon components have a maximum power of 695W and a component efficiency of 22.5%, which is relatively leading in the industry, and HJT efficiency ranks second in the efficiency of all component products. The company's P-type battery capacity burden is smaller than that of its peers, and the loss of asset impairment will be smaller later.

Energy storage is booming, another big Alpha

It has become the consensus of the industry that the global savings and household savings have been booming for a long time and the growth rate is higher than that of photovoltaic in the same period. The company's strategic foresight, early aware of the layout of optical storage integration, has become one of the first integrated component enterprises to set foot in the field of energy storage. In terms of large storage, CSIQ set up an energy storage business team in 2018 and injected Ates in 2020. The company has deep technology and high recognition of its products overseas, especially in the United States. The cooperation between components and energy storage business is high, and the controlling shareholder CSIQ energy storage development business reserve projects are more and continue to grow. As of March 31, 2023, Attes Group global energy storage project reserve total 47.42GWh to provide support for business development. With the reduction of the price of lithium carbonate and the accelerated growth of orders, the large reserves are expected to grow 3-4 times by 2024. In addition, the company has also made a breakthrough in household storage products, and the household system has been sold in the United States since it was released in September 2022.

Back to A to help the development, the cost is expected to be optimized.

The company's previous expenses are relatively high, mainly transportation and labor costs, high financial costs, and so on. After the company is split back to A, it will raise funds to make up for the deficiency in the upstream production side and increase the proportion of downstream large-size components production. At the same time, it will also provide financing channels for follow-up companies in the research and development of new technologies and further expansion of production. After the scale expansion, the superimposed capital is improved, and the company expense rate is expected to show a downward trend.

Profit forecast

We expect the company to make a profit of 45 or 5.5 billion in 2023-2024. Cover for the first time and give a buy rating.

Risk hint

1, the accelerated deterioration of the competition pattern; 2, the photovoltaic installation is not as expected; 3, the profit forecast hypothesis is not established or not as expected.