Event: The company released its 2024 quarterly report. 2024Q1 achieved operating income of 9.317 billion yuan, -17%/-30% YoY; realized net profit of 1,066 billion yuan, -6%/+70% YoY; realized net profit of 701 million yuan, +15%/+17% YoY. 2024Q1's gross sales margin was 17.64%, +0.81/-0.08pct; net sales margin was 11.33%, -0.29/+6.50pct.
The performance was in line with market expectations.
24Q1 power storage shipments soared, and the market share reached a record high. Benefiting from the further release of downstream demand, the company maintained rapid growth in 24Q1 energy storage and power batteries. In terms of energy storage batteries, the shipment volume was 7.02 GWh, +113.11%. According to Xinyi information data, the company ranked second in domestic energy storage cell shipments in March '24, accounting for 18.7%. The company currently accounts for about 7:3 between domestic energy storage and overseas energy storage shipments. In the future, it will further expand the overseas energy storage market, increase global market share, and enhance product profitability. In terms of power batteries, the shipment volume was 6.45 GWh, or +5.98%. Among them, the company's market share in the commercial vehicle sector increased significantly. According to data from the China Automobile Power Battery Alliance, the company ranked second in domestic NEV commercial vehicle loading volume, with a market share of 16.05%. We expect the company's overall power storage shipments to reach 85-90 GWh in 2024, including 35-40 GWh of power batteries and more than 50 GWh of energy storage batteries, and continuous improvement in the industry position.
Downstream demand in the consumer business is strong, and the low-altitude economy and other fields are being developed in depth. 2024Q1's consumer business revenue is about 2 billion yuan. Downstream demand for the company's small cylinders is strong. The 24Q1 shipment volume reached 200 million units, and reached more than 100 million units in a single month in March. Currently, the company's consumer batteries are in full production, mainly benefiting from strong demand for downstream tool products. In the field of low-altitude economy, the company cooperated deeply with American customers. Batteries using the new technology are currently in the A phase, and there are broad prospects for future development. In addition, the company's 46 large cylindrical production lines have been put into operation and achieved commercial delivery, helping the power business develop rapidly.
Investment advice: Considering the rapid development of the company's power energy storage business, we expect the company to achieve net profit of 50.40/60.11/7.203 billion yuan in 2024-2026, +24.4%/+19.3%/+19.8% year-on-year, corresponding EPS of 2.46/2.94/3.52 yuan, maintaining a “buy” rating.
Risk warning: downstream demand falls short of expectations; SMORE's performance falls short of expectations; industry competition intensifies.