Event: The company released its annual report for 2023 and the report for the first quarter of 2024. In 2023, the company achieved revenue of 8.089 billion yuan, +95.0% year on year; net profit to mother of 914 million yuan, +6.0% year on year; net profit after deducting non-return to mother of 857 million yuan, +7.5% year over year. Of this, Q4 revenue was 2,982 billion yuan, and net profit attributable to mother was 200 million yuan. 2024Q1 achieved net profit of 260 million yuan to mother, +17.8% year-on-year.
Benefiting from years of continuous boom in the photovoltaic industry, the company's revenue continued to grow sharply, but gross margin declined due to continued demand from downstream customers for cost reduction, phased excess PV production capacity, and market competition.
The market share of screen printing is at the forefront, and HJT products accelerate the acceptance of the entire line. The company's current main products are complete equipment for solar cell screen printing production lines and overall solutions for heterojunction high-efficiency battery manufacturing. In 2023, the solar photovoltaic industry achieved revenue of 8.051 billion yuan (accounting for 99.53% of total revenue), +96.84% over the same period last year, and the main business is still growing rapidly. Among them, screen printing products have achieved import substitution through continuous updates and iterations, as well as outstanding performance and cost performance advantages, and firmly occupy a leading position in the market. As the company's research and development focus, HJT battery equipment has achieved the entire line supply capacity. In 2023, the quantity was gradually increased and acceptance began one after another. As the mainstream of the market shifts from P-type to N-type batteries, the HJT business will provide a new growth point for the company's profit growth.
Improve the three-dimensional business layout and improve the performance of pan-semiconductor products. The company actively explores new fields, creates a multi-level three-dimensional business layout, and successively develops core equipment for display panels and core semiconductor packaging equipment, including OLED flexible screen laser cutting equipment, MLED full-line automation equipment solutions, semiconductor wafer packaging equipment, etc. The company attaches importance to research and development and actively improves product performance. Display panel products have been used by well-known companies in the industry such as BOE, Shentianma, and Vicino, and semiconductor packaging products have been approved by customers one after another in 2023.
The sharp rise in order volume showed a strong momentum, and R&D investment increased at the same time as project construction. According to the annual report data, the company's new orders increased dramatically in 2023, with inventory accounting for 46.43% of total assets, +9.74% year over year; customer advance payments increased, contract liabilities accounted for 36.42%, +6.78% year over year; sales expenses amounted to 667 million yuan, +118.66% year over year. The company continues to increase R&D capital and introduce high-end talents. It published 2 papers in the top international journal Nature Energy. The R&D expenses in 2023 were 763 million yuan, +56.25% over the same period last year. In terms of investment and construction, the construction progress of the “40 Heterojunction Solar Cell Equipment Complete Line Project” was accelerated in 2023. Coupled with the partial commissioning of the heterojunction industrialization project, the company's production capacity was further increased.
Profit forecast: Considering that the company's HJT equipment is still in an upward channel, we predict that the company's net profit for 2024-2026 will be 17.66/24.69/2,972 billion yuan, respectively, and the corresponding PE will be 18.1x/13.0x/10.8x, maintaining the “gain” rating.
Risk warning: PV demand falls short of expectations, industry competition intensifies, and competition in HJT equipment deteriorates.