The year-on-year profit growth rate was stable, and the performance was in line with expectations. The company released its 2023 annual report, which achieved revenue of 48.784 billion yuan, +34.38% year over year; net profit of 4.05 billion yuan, +15.42% year over year; net profit without return to mother of 2,755 billion yuan, +2.23% year over year; of these, Q4 achieved revenue/net profit attributable to mother/ net profit after deduction of 132.55/6.26/ 600 million yuan, respectively, +10.27%, -25.8%, +15.73%, month-on-month respectively.
The power energy storage battery business achieved a double increase in volume and profit. According to the company's financial report, the company's power business revenue in 2023 was 23.984 billion yuan, +31.41% year-on-year, with a comprehensive gross profit margin of 14.37%, and a shipment volume of 28.08 GWh; in 2023, the energy storage business revenue was 16.34 billion yuan, +73.24% year-on-year, with a comprehensive gross profit margin of 17.03% and shipments of 26.29 GWh. The total shipment volume of the company's power and energy storage batteries in 2023 was about 54.37 GWh. According to the company's official website, the growth rate increased significantly, mainly due to the expansion of the lithium iron battery customer matrix (Xiaopeng X9, Nacha U Max, GAC Aian S, GAC Aian 2024 yPlus). In addition, the company's energy storage batteries experienced a rise in production capacity, and large-scale shipments began in 24Q3.
Midstream joint ventures are gradually contributing to profits. According to the company's financial report, Defang Yiwei lost about 280 million yuan in 2023, and 23H2 showed a loss reduction trend; Xinghua Lithium Salt and Jin Kunlun contributed a total profit of 90 million yuan, and 23H2 lithium carbonate price fluctuations caused certain losses; Changzhou Betry and Jingmen Xinzhoubang contributed 114 million yuan and 19 million yuan respectively. The midstream joint venture factory project has entered a profit settlement period.
In 2024, the company will usher in a harvest period, and shipments in the lithium iron energy storage sector are expected to grow rapidly. According to the Ministry of Industry and Information Technology's model announcement, the company's power side focused on adding Guangzhou Automobile (lithium iron), Xiaopeng (lithium iron), and Hezhong (ternary square) to achieve steady expansion; according to the company's official WeChat account, 46 series large cylinder production capacity progress is leading the way, laying out LF560K oversized batteries, and incorporating key technological innovations in cooperative energy storage projects such as the State Grid, Powin, and Huawei.
Profit forecasting and investment advice. EPS is expected to be 2.47, 2.98, and 3.48 yuan/share in 2024-2026. Taking into account the company's growth space, market position and comparable company valuation level, the 2024 PE valuation will be given 20 times, and a reasonable value of 49.42 yuan/share will be given to maintain the “buy” rating.
Risk warning. Vehicle sales fell short of expectations; technical upgrades fell short of expectations; raw material prices fluctuated.