Incident: The company released its 2023 annual report. In 2023, the company achieved revenue of 4.166 billion yuan, +1.2% year-on-year, and achieved net profit of 104 million yuan, or -39.5% year-on-year. It is proposed to calculate a total of 56.8 million yuan in credit impairment provisions and asset impairment reserves. Among them, 23Q4 achieved revenue of 825 million yuan, -7.73% year-on-year, -26.30% month-on-month, and realized net profit of 0.18 million yuan, +132% year-on-year and -47.40% month-on-month. At the same time, the company announced the 2023 profit distribution plan, which plans to distribute 0.72 yuan for every 10 shares, for a total cash dividend of 31.493 million yuan. The performance was in line with expectations.
Shipments of film suitable for N-type batteries have continued to increase in 23 years. As of 2023, the total shipment volume of the company's adhesive film products reached 267 million square meters. Affected by price reductions in the industrial chain, the overall gross margin of adhesive film products reached 6.44%, -1.31 pct year on year. Among them, the company cooperated with major manufacturers such as Jingao, Yidao, Tianhe, Artes, and Zhengtai, and TopCon film shipments increased by more than 200% over the same period last year. HJT optical transfer film products have shipped 26.62 million square meters in 23 years, and the supply customers have expanded from Huasheng New Energy to more than 20 companies such as Huasheng, Elken, Mingyang, Guosheng, Quanwei, Runhai, Longji, Tongwei, Liansheng, etc.; for the single-section perovskite technology route, the company's TPO non-adhesive thermal plastic film has been shipped in batches, and downstream customers have now covered GCL Optoelectronics and Electrothermal Energy.
Film and backboard production capacity is expanding rapidly. In 2023, the company increased the line speed of old equipment by 10%-20% through technological transformation, and production capacity is expected to expand to 400 million square meters/year in the future. It is planned to have a film production capacity of 10GW and a backboard production capacity of 10GW. At the same time, the company is planning a phototransfer film production base in Xuancheng, Anhui. The first phase plans a phototransfer film production capacity of 6GW. Furthermore, the company's first overseas production base, the Vietnamese factory, is scheduled to be put into operation in mid-2024, making the first step for the product to go overseas.
Investment advice: We expect 24E-26E's annual net profit to the company's parent to be 2.01/3.20/428 million yuan, YoY +93.7%/+59.5%/+33.6%, and EPS 0.46/0.73/0.98 yuan respectively. Maintain a “buy” rating.
Risk warning: PV demand is less than expected, raw material prices fluctuate, and market competition intensifies