Description of the event
Corstar released its 2023 annual report. In 2023, the company achieved revenue of 5.440 billion yuan, a year-on-year increase of 23.61%, a year-on-year increase of 28.79%, after deducting non-net profit of 818 million yuan, an increase of 34.46%; in the fourth quarter, it achieved revenue of 1,371 billion yuan, a year-on-year decrease of 17.46%, and net profit to mother of 154 million yuan, a year-on-year decrease of 1.43, a year-on-year decrease of 28.62%.
Incident comments
By business, the annual revenue from the new energy business is 2.73 billion yuan, up 34.8% year on year. It is estimated that energy storage revenue is about 1.6 billion yuan, up about 20% year on year, photovoltaic inverter revenue is about 900 million yuan, up about 60% year on year, and charging pile revenue is about 200 million yuan, double year on year; annual data center business revenue is 2.67 billion yuan, up 14.5% year on year. The split into Q4 was affected by the procurement cycle, and revenue from photovoltaic inverters and charging pile products increased sharply; in the energy storage business, the European market continued to vigorously remove inventory since 23Q2, leading to a sharp decline or even stagnation in industrial chain shipments. The company's Q4 energy storage business revenue declined sharply from month to month, in line with industry expectations; data center revenue is expected to increase slightly from month to month, contributing to stable performance.
In terms of profit, the company's gross margin increased steadily. The gross profit margin of the new energy business was 27% for the whole year, up 1.19 pct year on year, and the gross profit margin of the data center was 38.11%, up 2.18 pct year on year. Split to Q4, gross margin was 32.71%, down 0.70 pct year on year and 0.44 pct month on month. Judging from the sharp drop in shipments of energy storage products, gross margin remained good due to high growth in other businesses. The Q4 fee rate was 16.42%, up from month to month, mainly due to the payment of equity incentives to employees in Q4.
Looking ahead to 2024, in terms of the energy storage business, the decline in battery prices continues to spread to terminals, and policies in emerging markets in Poland and Hungary increase. Demand for household storage in Europe is still growing at a considerable rate. Inventories are expected to gradually return to normal levels in H1. The company's shipments are expected to resume growth in H2. The photovoltaic business is expected to benefit from the increase in terminal demand and maintain a growth rate of 30-40%. In terms of charging pile business, the increase in charging pile projects of central state-owned enterprises and strict supplier qualification assessments will help the company to increase both the volume and profit of the charging pile business. Furthermore, the company is actively certifying products adapted to European and American standards in overseas markets, which is expected to increase performance in 2024. The data center business is expected to benefit from increased demand for AI computing power and is expected to achieve a 15-20% growth rate. The company is expected to achieve net profit of about 900 million yuan in 2024, corresponding to PE of about 14 times, and continues to be recommended.
Risk warning
1. The progress of household storage delivery falls short of expectations;
2. Market competition risk.