Event: On August 30, 2023, the company released its 2023 semi-annual report. In 2023, H1 achieved revenue of 4.375 billion yuan, +7.62% year on year, and realized net profit of 251 million yuan, +3.05% year on year.
Among them, Q2 achieved revenue of 1,889 million yuan, -21.79%/-24.69% of the same period; net profit of 69 million yuan, or -55.10%/-62.28% of the same period.
Energy storage continues to grow, and power revenue is declining. The company's energy storage pool business revenue increased significantly year-on-year in the first half of the year, and the consumer battery business continued to maintain steady year-on-year growth, but the power battery business declined sharply, resulting in a small increase in overall revenue. The company's energy storage business is estimated to have revenue of 2.8 billion yuan in the first half of the year, accounting for 64% of total revenue.
Q2 Impairment losses put pressure on profits, and contract liabilities increased dramatically. Q2 The company's expenses for the period were 190 million yuan, with a period cost rate of 9.9%, +0.3 pct/+0.1 pct over the same period. The company calculated credit impairment losses of 44 million yuan and asset impairment losses of 19 million yuan, which led to a sharp decline in net profit. Contract liabilities at the end of the period were 530 million yuan, up 45.9% from the beginning of the year; H1 net operating cash flow was 190 million yuan, up 172% year on year; and capital expenditure was 950 million yuan, up 201% year on year.
Production capacity continues to be built, and the market layout is global. During the reporting period, the company participated in the establishment of the Guangzhou Energy Storage Group, set up offices in Europe, North America, and Japan, increased the development of major overseas energy storage markets, and cooperated strongly with Hutou. It is hoped that the African energy storage market will become further internationalized. In the first half of the year, the company's lithium battery production was 1,725 billion Ah, with an annual production capacity of 4,044 billion Ah; in terms of production capacity construction, the company plans to build energy storage battery manufacturing bases in Liuzhou, Quzhou and Qingdao. The production capacity under construction reached 3,733 billion Ah. The first phase of the Quzhou Smart Energy Storage Manufacturing Base project was officially launched and put into operation in the first half of the year. With the release of production capacity, the company's energy storage business revenue is expected to grow further.
Profit forecast, valuation and rating: The company actively lays out the energy storage business and develops new technologies such as sodium electricity. Considering that the company's power battery revenue growth in 23 years was under pressure, and the competitive pressure for power storage at home and abroad increased in 24, we lowered the company's net profit forecast for 2023-24 to 714.1,184 million yuan (21% down/ 16% reduction), adding 1,466 billion yuan to the current stock price forecast of 1,466 billion yuan. The current stock price corresponds to PE 22/14/10X. Considering that the company's energy storage business was released rapidly in 23-25, the new technology continues to be released. Currently, the stock price is Low, still maintaining a “buy” rating.
Risk warning: raw material prices fluctuate; demand for energy storage falls short of expectations; increased competition; changes in technology routes.