2024Q1 performance declined, short-term pressure did not change long-term growth, and maintained a “buy” rating
The company released its 2023 annual report. In 2023, the company achieved revenue of 99.01 billion yuan, -1.59%; net profit to mother of 1,479 billion yuan, -43.48% year on year; net profit of 1,127 billion yuan, 49.97% year on year; gross profit margin of 32.22%, -4.49pcts year on year. 2024Q1 achieved revenue of 2.116 billion yuan, -9.82% YoY, -10.75%; net profit to mother of 0.33 million yuan, -91.27% YoY, -92.15% month-on-month; net profit net profit of 0.58 billion yuan, -82.83% YoY, -72.06% month-on-month; gross profit ratio 26.48%, -8.33pcts YoY, -1.95pcts month-on-month. The short-term pressure on the company's performance and the decline in profitability are mainly due to the downward impact of the market and the 12-inch investment project. Therefore, we lowered the company's net profit forecast for 2024-2025 to 13.40/1,667 billion yuan (previous value was 27.07/3.39 billion yuan) and added the 2026 profit forecast of 1,960 billion yuan, corresponding EPS to 1.01/1.26/1.48 yuan. The current stock price corresponds to PE 35.7/28.7/24.4 times. We are optimistic about the company Performance improvements brought about by the continuous upgrading of the product and manufacturing businesses in the future will maintain a “buy” rating.
Looking at expanding the automotive electronics market and continuing to promote product iterative upgrades, the company will comprehensively expand the automotive electronics market in 2023, with products entering key car companies such as BYD, Geely, and FAW. The reserves of automotive-grade products have been steadily promoted, and SiC products have received the top label from well-known car companies, and their influence continues to expand; in addition, the company has increased its expansion efforts in the fields of photovoltaic inverters, inverters, etc., and its market share is expected to increase steadily. The products will enter key customers such as Sunshine Power and Deye Co., Ltd., and the market share is expected to accelerate in the future. In terms of products, in terms of MOSFETs, the company completed vehicle certification for 35 products and batch supply to automotive customer terminals throughout the year; the sales share of benchmark customers in the new energy vehicle, charging pile, energy storage and other industries continued to grow, further expanding its market share; in terms of IGBT, IGBT's revenue in 2023 was nearly 700 million yuan, a significant increase in scale. Among them, 8-inch IGBT wafers contributed 62%, further helping accelerate product range upgrading to industrial and photovoltaic applications, increasing sales share in the industrial (including photovoltaic) sector to more than 70%, and deepening cooperation with leading customers in the automotive market; for three and a half generations, the annual revenue ratio of silicon carbide and gallium nitride power devices was +135%. The SiC JBS G2 platform has completed the development of more than 40 products in the 650 V and 1200 V series, and has achieved sufficient growth momentum for leading customers in fields such as electric piles.
Risk warning: downstream demand falls short of expectations; customer introduction falls short of expectations; technology research and development falls short of expectations.