incident. On April 19, 2024, the company released its annual report for the year of 2023. In '23, the company achieved revenue of 31.605 billion yuan, a year-on-year change of +37.11%, achieving net profit of 939 million yuan, a year-on-year change of +201.28%, net profit after deducting 116 million yuan, and a year-on-year change of +122.56%.
24Q1 performance split. Revenue and net profit: The company's 2024Q1 revenue was 7.508 billion yuan, +4.61% year on month, -23.60% month on month, net profit to mother was 0.69 million yuan, -8.56% year on year, -89.31% month on month, net profit after deduction of 11 million yuan, +195.26% year on month, and -83.81% month on month. Gross profit margin: 2024Q1 gross margin was 17.86%, -1.08pct yoy, +1.09pct month-on-month. Net interest rate: 2024Q1 net interest rate was 0.48%, -0.98pcts year-on-year, and -5.71pcts month-on-month. Expense ratio: The company's expense ratio for the 2024Q1 period was 15.33%, year-on-year -1.93pcts. Among them, sales, management, R&D, and finance expenses were 2.21%, 4.32%, 5.77%, and 3.04%, respectively.
Shipments have increased rapidly, and product strength has reached a new level. The company delivered more than 40 GWh of products in '23, an increase of more than 40% over the previous year. Among them, power battery systems and energy storage battery systems achieved revenue of 230.51 billion yuan and 6.932 billion yuan respectively, up 24.72% and 97.61% year on year. In May '23, the company released the L600 Qichen battery with the LMFP system. The battery cell energy density reached 240 Wh/kg, and the system energy density reached 190 Wh/kg, which can be quickly charged in 18 minutes. Second, the 360Wh/kg ternary semi-solid state battery has passed strict acupuncture tests. The system energy density can reach 260 Wh/kg, and the range exceeds 1000 km.
Build an integrated industrial chain and take the global strategy to the next level. 1) Mineral resources side: The company accelerates the development of mineral resources in Yichun, Indonesia, Argentina, etc., and the release of production capacity at material bases in Lujiang, Wuhai, Feidong, etc. Furthermore, in July '23, the company signed a strategic cooperation agreement with BASF to jointly promote the application of related chemical materials in the battery field; 2) Battery manufacturing side: The company accelerated overseas base construction. In October '23, the company announced plans to invest in lithium battery projects and battery material projects in Illinois and Michigan. In December '23, Guoxuan Hi-Tech's first battery pack product in the US officially went offline at the Fremont plant.
In the same month, the first battery product in the Thai factory was officially launched. The annual production capacity of the first phase pack of the Thai factory is planned to be 2 GWh, and the future plans are to expand to 8 GWh. 3) Downstream application side: In terms of energy storage, the company has successively signed strategic cooperation agreements with Southern Grid Energy Storage and Ganneng Co., Ltd. to carry out in-depth energy storage project cooperation on application scenarios such as power grid side and user side. In terms of power, in May '23, Hefei Guoxuan, a wholly-owned subsidiary of the company, received a purchase order letter from Volkswagen to supply Volkswagen's standard lithium iron phosphate batteries. Furthermore, in the field of low-altitude economy, the company signed a strategic cooperation agreement with Ehang Intelligence to jointly develop eVTOL products.
Investment advice: We expect the company to achieve revenue of 361.47, 471.36, and 57.803 billion yuan in 2024-2026, with year-on-year growth rates of 14.4%, 30.4%, 22.6%, and net profit of 12.57, 17.83, and 2,515 billion yuan, respectively. The year-on-year growth rates are 34.0%, 41.8%, and 41.1%, corresponding PE is 26, 19, and 13 times, taking into account the company's active construction of an integrated industrial chain, leading the overseas market process, and maintaining the “recommended” rating.
Risk warning: raw material price fluctuations exceed expectations, new energy vehicle sales fall short of expectations, production capacity project investment and construction progress falls short of expectations