动力电池下游扩产节奏放缓，1H23 公司新签订单增速有所下滑。根据公告，1H23 公司新签订单约27 亿元（以下订单均为含税口径），同比-25%，我们判断主要由于动力电池下游厂商扩产节奏放缓；截至1H23 末公司在手订单累计金额约为85 亿元；对比2022 年/1Q23 公司新签订单分别约77/13 亿元，分别同比+35%/+25%，截至2022 年末/1Q23 末公司在手订单累计分别约81/84 亿元。2Q23 performance meets our expectations
The company announced 1H23 results: 1H23 achieved revenue of 2.146 billion yuan, +80% year on year, of which the power battery business was +110% to 1,804 million yuan, mainly due to an increase in on-hand orders and an increase in acceptance projects; net profit of 185 million yuan, +96% year on year; and net interest rate of +0.7ppt to 8.6% year on year. Among them, 2Q23's quarterly revenue was 1,251 billion yuan, +67% year on year; net profit for the same period was 153 million yuan, +84% year on year. The company's 2Q23 performance was in line with our expectations.
Development trends
The pace of downstream power battery production expansion has slowed down, and the growth rate of new orders signed by 1H23 has declined somewhat. According to the announcement, 1H23's new orders were about 2.7 billion yuan (the following orders are all tax-inclusive), or -25% year-on-year. We judge that this is mainly due to the slowdown in the pace of expansion of production by downstream power battery manufacturers; as of 1H23, the cumulative amount of orders in hand at the end of 1H23 was about 8.5 billion yuan; compared to 2022/1Q23, the total number of orders signed by the company was about 77/13 billion yuan, respectively, +35%/+25%. At the end of 2022/1Q23, the total number of orders on hand at the end of 2022/1Q23 was about 81/84 billion yuan.
Benefiting from the acceleration of TopCon's downstream production expansion, the company placed orders for photovoltaic laser doping equipment. According to the company's announcement, the company's photovoltaic business has received orders from customers such as Jingke Energy, Tianhe Solar, Tongwei Co., Ltd., Hongyuan Green Energy, Jietai, Zhengtai, Artes, Hesheng Silicon, and GCL. Up to now, the company's TopCon laser has signed a contract of 350 GW+ for one-time doping equipment. We believe that TopCon's downstream production expansion scale this year has exceeded our previous expectations and is expected to drive the company's related equipment orders to grow rapidly.
Invest in research and development in various fields to actively cultivate new momentum for growth. The company increased R&D investment and expanded new product lines. 1H23's R&D expenses increased 73% year-on-year to 241 million yuan. In the field of power batteries, the company has expanded from its original business such as die-cutting and assembly lines to front-end and back-end equipment, laying out new products such as roller manufacturing, high-speed winding, high-speed laminating, and modules/PACK. At the same time, it is developing energy storage and overseas markets. We believe it may be expected that it may partially offset the impact of the slowdown in downstream production expansion. Furthermore, the company lays out technologies such as the massive transfer of micro-LED lasers in the new display field. We believe the company has the potential to become a laser technology platform type company.
Profit forecasting and valuation
Keep the 2023 and 2024 earnings forecasts unchanged. The current stock price corresponds to the price-earnings ratio of 11.4 times/7.8 times of 2023/2024. Maintaining an outperforming industry rating and a target price of 64.92 yuan, corresponding to 17.0 times the 2023 price-earnings ratio and 11.6 times the 2024 price-earnings ratio, there is 49.5% upside compared to the current stock price.
risks
Order fulfillment progress falls short of expectations; new product line expansion falls short of expectations; downstream customer production expansion plans fall short of expectations; increased market competition leads to a risk of falling gross margin.
