Revenue and net profit to mother declined year-on-year in 1Q24
1Q24 achieved revenue of 831 million yuan, or -40.75%/-39.39% YoY; net profit to mother of 134 million yuan, 42.48%/-12.59% YoY, net profit of 116 million yuan (YoY), 48.61%/-18.95% YoY. The year-on-year decline in net profit to the mother mainly affected demand from downstream overseas account storage customers. Considering that household storage demand was weaker than expected, we lowered the company's optical storage business revenue assumption. The company's net profit for 24-26 was 9.06/11.32/1,324 million yuan, respectively (previous value: 976/11.39/1.33 billion yuan).
Referring to the consistent forecast of the company Wind in 24, the average PE was 15 times, and the company was given a reasonable PE of 15 times in 24 years, corresponding to a target price of 23.14 yuan (previous value was 23.94 yuan), maintaining the “gain” rating.
1Q24 Downstream storage affects demand, and profitability increased month-on-month
1Q24 achieved revenue of 831 million yuan, or -40.75% year over year. The year-on-year decline in revenue was mainly due to a temporary backlog of downstream channel customer inventory in the overseas account storage business and a decrease in delivery volume of household storage products due to phased fluctuations in market demand. Net profit to mother was 134 million yuan, or -42.48% year over year. 1Q24 achieved gross profit margin of 33.36%, +1.33/+0.65 pct yoy, net profit margin 16.16%, and YoY -1.19/+4.86 pct. The cost rate for the 1Q24 period was 16.13%, +5.29 pct year on year. Among them, sales, management, R&D, and finance expenses rates were +1.89 pct, +1.90 pct, +4.64 pct, and -3.15 pct, respectively. The decline in financial expenses was mainly due to an increase in interest on deposits. The increase in other expenses was mainly due to a decline in income and relatively rigid expenditure.
The collaborative layout of photovoltaic energy storage is expected to resume growth after being stored overseas
The company's photovoltaic+energy storage industry collaboration has created a complete product matrix. The company's products use household energy storage as an entry point. In 2018-2019, they developed their own optical storage hybrid inverters, cooperated with Ningde Times to solve the energy storage battery cell problem, and subsequently launched household inverters and household energy storage all-in-one products. Combining a rich product structure, upstream and PACK, a joint venture established by Ningde Times, accelerated production capacity construction, integrated the company's inverter technology and Ningde Era lithium battery storage solutions to improve the energy storage business layout, and focus on the European and American markets with the channel advantages accumulated by the data center business. Overseas account storage began to be removed in the second half of last year, causing temporary pressure on the company's performance. The optical storage business is expected to resume growth after the removal is completed.
The charging pile business is expected to accelerate its overseas expansion with channel advantages
The company has a complete range of charging pile products, integrated solutions and customized solutions, and is widely used in the transportation industry, public charging stations, public transportation and commercial residential areas. In the domestic market, the company has been deeply involved for many years and has accumulated many high-quality customers. In overseas markets, the company is actively promoting overseas market certification, speeding up the development of charging pile products that meet European standards, CHAdeMO, and North American standards. It is expected that the global service system established by data centers and optical storage businesses will be used in the future to accelerate the release of charging piles overseas with channel advantages.
Risk warning: Shipments of photovoltaic inverters and energy storage fell short of expectations, profitability declined due to increased competition in the industry, and shipments of charging piles fell short of expectations.