Introduction to this report:
The 23Q2 company is actively seizing the German balcony photovoltaic market and developing large domestic storage. Revenue and profit growth is better than the industry average. We expect Q3 slightly reverse sales volume to be flat month-on-month, and Q4 will return to Q1 level.
Key points of investment:
Maintain ratings to increase holdings. Due to slightly negative inventory pressure in the industry, we lowered our expected EPS for 2023-2025 to 9.16 (-4.09), 13.60 (-10.70), and 19.18 (-15.95) yuan. Refer to the comparable company's average valuation of 35 times PE in 2023, giving the company 35 times PE in 2023, corresponding target price of 320.60 (-138.50) yuan, maintaining the rating for increasing holdings.
The company's Q2 performance was better than the industry average. 23Q2 The company is actively seizing the German balcony photovoltaic market and developing large domestic storage. Revenue and profit growth is better than that of the industry. The company's Q2 gross profit margin was 38.43%, -8pcts month-on-month. The decline in gross margin is expected to be due to an increase in the share of large domestic reserves in revenue. The Q2 net interest rate was 35.44%, +5 pcts. This was mainly due to the positive contribution of financial expenses, which reached 88 million yuan, of which both interest income and exchange income contributed.
Slightly negative gross margin is strong, and domestic reserves are large. 1) Microinverse: 23H1's microinverse and monitor business revenue was 883 million yuan, yoy +100%, and gross margin remained stable, close to 50%, of which 891,800 units were sold and 101,100 units of monitoring equipment were sold. 23H1 expects Europe to account for 60% + of revenue (of which balcony systems contribute about 50%), North America 15%, and Latin America 10%. Estimated Q2 micro-reverse sales volume was approximately 330,000 units, -41% over the previous year. We expect Q3 micro-inverse sales volume to be flat month-on-month, Q4 to return to Q1 level, and annual sales volume is expected to be 1.8 million units, yoy +50%. 2) Big storage: Q2 achieved revenue of the domestic large storage system of 86 million yuan, gross margin of about 11%, and limited profit contribution. We expect the large storage business to achieve annual revenue of 200 million yuan. 3) Overseas storage: The company mainly promotes Europe. The 23H1 network connection certification has been completed in Germany, Poland, France and other countries. We expect annual sales volume of 10,000 units.
Catalyst: Inventory removal progress has exceeded expectations, and energy storage business has accelerated release.
Risk warning: New product development falls short of expectations, demand falls short of expectations, and industry competition intensifies.