Main points of investment:
Event: the company released the three-quarter report of 2023, saying that in the first three quarters of 2023, the company realized revenue of 4.75 billion yuan, an increase of 31.85% over the same period last year; net profit of 851 million yuan, an increase of 15.96% over the same period last year; and net profit of 820 million yuan, an increase of 14.45% over the same period last year. Q3 achieved an operating income of 1.54 billion yuan, an increase of 20.1% over the same period last year, a net profit of 270 million yuan, a decrease of 16.75%, and a deduction of 265 million yuan, a decrease of 15.42%, which is in line with our expectations.
The decline in performance is mainly due to the transfer of power stations, Q4 EPC, TopCon profits are expected to be gradually released. According to the company announcement, the company achieved 1.01 billion kilowatt hours in the first three quarters of 2023, down 32% from the same period last year, mainly due to the sale of 388000 kilowatt photovoltaic installations at the end of 2022 (evaluation base date May 31, 2022, loss of control in November 2022, the benefits during the period are transitional profits and losses, and the agreement stipulates that the transitional profits and losses shall be enjoyed by the transferee), which is estimated to affect the company's net profit of about 50 million yuan. Basically in line with the decline in the company's overall net profit, the company's EPC and TopCon barely contributed profits in the third quarter due to the progress of the project. According to the company's project progress and battery chip production announcement, Q4 company is expected to have close to 1GW photovoltaic EPC project sales contribution profit, at the same time, the company has put into production 6GW TopCon battery chip, is expected to start shipping in the near future, according to the single watt profit 0.005-0.07 yuan / W estimate, the business will bring the company a net profit of about 1-140 million yuan, in summary, Q4 company net profit performance is outstanding, full-year profit is safe.
The first phase of 6GW TopCon battery chips has been put into production smoothly, and the follow-up production capacity is expected to continue to be realized. According to the company announcement, the company announced in December 2022 that it plans to put into production of 20GW TopCon battery chips, and the first stage of planning 12GW will gradually be put into production in 2023-2024, in which 6GW capacity has been put into production as scheduled as planned, taking into account the completion of plant, labor and other preliminary investment, the remaining 6GW capacity progress is expected to be accelerated and is expected to be launched in mid-2024. According to the net profit per unit watt of TopCon, the production of 12GWTopCon battery will bring an annual profit of 6-840 million yuan to the company.
Capacity expansion, rapid growth of orders, rapid growth of energy storage business. According to the company announcement, the company distributes the business model of "participating in upstream cell + expanding PACK production capacity + sharing energy storage operation" in the field of energy storage. At present, the company has fully put into production the factory of Yiwei Linyang 10GWh battery, and the shipment volume affected by climbing commissioning in the first half of the year is limited, which only contributes 20 million yuan to the company's investment income, and is expected to improve marginally in the second half of the year. In addition, the company plans to build in Qidong 6GWh energy storage pack production line, of which 2022 1.5GWh has been fully put into production, 2023H1 second production line has been put into production, the existing annual production capacity 3GWh, is expected to greatly enhance the company's product shipping capacity. From the point of view of the order, the company has reserved more than 5GWh as of the first half of 2023. We believe that, relying on the industrial advantages in the energy industry and the layout of the whole industry chain of the energy storage industry, the company has a strong ability to obtain orders. with the successive fulfillment of orders, the company's energy storage profits are expected to increase rapidly.
Profit forecast and valuation: we maintain the company's 2023-2025 homing net profit forecast of 1.21 billion yuan, 1.61 billion yuan and 1.81 billion yuan respectively, the current stock price corresponding to PE are 11, 9 and 8 times, lower than the industry average, maintain the "buy" rating.
Risk hint: the progress of photovoltaic project development is not as expected, and the shipment volume of energy storage business is not as expected.