The company released its 2023 annual report and achieved a profit of 1,076 billion yuan throughout the year, maintaining year-on-year growth; the company's traditional core business developed steadily, and the power and energy storage battery business had broad room for growth; and maintained an increase in holdings ratings.
Key points to support ratings
Net profit due to mother in 2023 was 1,076 billion yuan, up 0.77% year on year: the company released the 2023 annual report, achieving full year revenue of 47.862 billion yuan, a year-on-year decrease of 8.24%; realized net profit of 1,076 billion yuan, up 0.77% year on year; realized net profit without return to mother of 973 million yuan, up 20.39% year on year.
According to the company's annual report estimates, in the fourth quarter of 2023, net profit attributable to mother was 273 million yuan, a year-on-year decrease of 28.37% and a year-on-month decrease of 25.37%; net profit without deduction to mother was 363 million yuan, an increase of 12.00% year-on-year and 51.55% month-on-month.
The scale effect of the power battery business is showing, and the energy storage business is growing rapidly: in 2023, the power battery business achieved shipments of 11.66 GWh, revenue of 10.795 billion yuan, a year-on-year decrease of 14.91%, gross margin increased 0.94 percentage points year-on-year to 11.22%, and the large-scale effect of the business gradually became apparent. In 2023, the company's energy storage business achieved revenue of 1,110 billion yuan, a year-on-year increase of 144.00%, and gross margin decreased 1.09 percentage points year-on-year to 19.04%. In terms of power, the company has successively received cooperation from domestic car companies and leading new car companies on various projects, and has established cooperative relationships with many well-known foreign car manufacturers, gradually opening up market space.
The self-supply rate of consumer battery cells has increased, and profitability is expected to continue to improve: in 2023, the consumer battery business achieved revenue of 28.543 billion yuan, a year-on-year decrease of 10.85%, and gross margin increased 1.12 percentage points year-on-year to 14.91%. In the future, the company will continue to innovate, increase the company's share of consumer batteries in customer products, further increase the cell self-supply rate, and further enhance its own profitability.
The pace of going overseas has accelerated, and the global layout has been further improved: in 2023, the company will add new overseas factories in Hungary, Morocco and Vietnam. At present, the company has set up manufacturing bases in many domestic provinces and countries such as India, Vietnam, Hungary, Morocco, etc., and has set up branches in the United States, France, Germany, Israel, South Korea, Japan, etc., and the global layout has been further improved.
valuations
Under the current share capital, based on the company's annual report, considering the intensification of market competition and falling battery and material prices, we adjusted the company's 2024-2026 earnings forecast to 0.68/0.90/1.13 yuan (the original forecast was 0.92/1.19/- yuan), corresponding to a price-earnings ratio of 20.9/15.8/12.6 times; maintaining an increase in holdings rating.
The main risks faced by ratings
Global demand for 3C products falls short of expectations; NEV industry policy risks; the company's power battery research and development, capacity release and digestion fall short of expectations.