The company achieved net profit of 418 million yuan in 2023Q3, +72% over the same period last year. In 2023Q3, the company achieved operating income of 10.410 billion yuan, +24%, and -4%; net profit of 418 million yuan, +72%, -24%; net profit after deduction of 733 million yuan, +149%, +29%; the company achieved operating income of 28.017 billion yuan in the first three quarters of 2023, +33%; and realized net profit of 1,279 billion yuan, +71%.
Shipments of component products are growing rapidly, and overseas orders for heterojunction components are progressing smoothly. In the first three quarters of 2023, the company's component shipments confirmed revenue of 14.4 GW, and sales volume increased by about 36% year on year; overseas, with Malaysia's 3GW production capacity reaching full production, it is expected that the company's share of overseas market sales will increase further in the future; in terms of HJT components, the company has sent 60 MW to Europe, 50 MW to Brazil, and 8 MW to Southeast Asia since Q3, with total overseas shipments exceeding 100 MW. According to incomplete statistics, in the first three quarters of 2023, the company signed more than 2.2 GW of new overseas heterojunction battery module orders, covering customers in Singapore, Australia, Europe and other regions. With the gradual release of the company's HJT product production capacity, it is expected that the company's shipment volume will increase further in 2024.
HJT battery module production capacity climbed smoothly, and cost reduction and efficiency plans continued to advance. At present, the average mass production efficiency of the company's heterojunction production line has reached 25.5%, and the yield is 99%. The company's 4GW and Ninghai 5GW heterojunction production lines have been successfully put into production and climbing smoothly. It is expected that the production capacity of HJT battery modules above 9 GW will be formed by the end of the year. In terms of costs, the cost reduction plans for metallization costs and non-silicon costs are progressing smoothly, and it is expected that further cost reductions will be achieved in the fourth quarter. Looking ahead to 2024, the company still has a comprehensive cost reduction plan. By reducing silver paste consumption, introducing indium free targets, and using ultra-thin silicon wafers, etc., the company's HJT products still have a lot of room for cost reduction.
As a result of the arbitration, higher costs were incurred, and the company's net profit to the parent was affected by the accrual. The ICC (International Court of Arbitration) determined the arbitration of the contract dispute between the company and customer Focus in the third quarter. According to the ruling, the company will pay Focus a total of US$71.72 million (approximately RMB 514 million). Based on the precautionary principle, the company included all of the 514 million yuan in non-operating expenses, resulting in non-recurring profit and loss of about 315 million yuan in the third quarter alone, which had a significant impact on the company's net profit.
Risk warning: demand for optical storage falls short of expectations; customer development falls short of expectations; production progress falls short of expectations.
Investment advice: Lower the profit forecast and maintain the “increase in holdings” rating. Considering the recent sharp drop in battery module prices, increased competition in the photovoltaic industry, and the lack of installed capacity in the energy storage market in some countries, etc., we lowered the company's profit forecast. The estimated net profit for 2023-2025 is 18.2/22.3/2,800 million yuan (the original forecast was 19.5/27.6/3.66 billion yuan), +92/23/ +26% year-on-year, and the EPS is 1.59/1.95/2.46 yuan (the original forecast was 1.71/2.42/3.21 yuan), corresponding to the current dynamic PE of 12/9 /8 times, maintaining the “Overweight” rating.