Incident: The company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved operating income of 59.146 billion yuan, a year-on-year decrease of 11.74%, and realized net profit of 3.416 billion yuan, a year-on-year decrease of 49.90%, and a cash dividend of 2.6 yuan (tax included) for every 10 shares; 2024Q1 achieved operating income of 99.33 billion yuan, a year-on-year decrease of 43.62%, and realized net profit to mother of -800 million yuan, a year-on-year decrease of 139.05%.
Silicon wafer sales continued to grow at a high rate, and asset depreciation of 3,940 billion yuan was calculated in 2023 based on prudential principles.
(1) In 2023, the company's silicon wafer shipments increased 68% year on year to 114 GW, and the overall market share of silicon wafers remained leading the global industry. Among them, the N-type market share remained the first in the export market share. The PV silicon wafer sector's revenue was -13.97% year-on-year to 43.791 billion yuan, and gross margin increased 2.77 pcts to 21.79% year on year.
(2) In 2023, the company's PV module shipments increased 29.8% year on year to 8.6 GW, the module sector's revenue was -14.14% year over year to 9.309 billion yuan, and gross margin increased 1.01 pct year on year to 8.37%. (3) Affected by factors such as sharp fluctuations in global photovoltaic product prices, the company calculated a total impairment of 3,940 billion yuan in 2023 (of which inventory depreciation, long-term equity investment impairment, and contract asset impairment were 29.15/10.13/ 001 billion yuan, respectively).
The sales scale of 2024Q1's photovoltaic materials increased 40% year on year to 34.95 GW, and module shipments increased 16.8% year on year to 1.6 GW. However, against the backdrop of a continuous decline in industry prices, the company's operations were under pressure. The gross margin fell 1.38 pcts to 5.56% month-on-month, and the estimated asset depreciation was 608 million yuan.
PV technology remains industry-leading, and production capacity expansion is progressing steadily.
The company continues to increase R&D investment and technological breakthroughs in the photovoltaic field and maintain industry leadership. In terms of silicon wafers, as of the end of 2023, the company's crystal/chip labor productivity was 25/27 MW/person/year, respectively, leading 71%/98% compared to the industry's sub-priority. In the context of unit depreciation of about 0.01 yuan/W, the company's total cost was leading the industry's suboptimal by about 0.03 yuan/W. In terms of components: In 2023, the company completed the development of tile 4.0 products and achieved mass production. Mainstream products are two levels or more ahead of competitors in power and more than 0.2% in efficiency.
The company is steadily expanding its photovoltaic production capacity. By the end of 2023, the crystal production capacity reached 183 GW, and the production capacity of high-efficiency tile modules reached 18 GW; the company also carefully but firmly promoted the global strategy, actively evaluating and exploring industrial layout projects in key countries or regions (US, Europe, Middle East, etc.) on the basis of industry-leading Industry 4.0 flexible manufacturing, technological innovation, intellectual property management and ESG.
Maintaining a “buy” rating: The company's profit is under great pressure due to a sharp drop in prices in the industrial chain. We lowered our profit forecast. It is estimated that in 24-26, the company will achieve net profit of 17.30/28.85/4.189 billion yuan (85% down/78% /increase). The current stock price corresponds to 24 times the PE in 24 years. Although the company's profits are being phased under pressure due to factors such as oversupply in the industry, the company's PV silicon wafer supply chain guarantee and non-silicon cost advantages are expected to expand further in the future. At the same time, the global layout and downstream differentiation are expected to open up new growth space and maintain a “buy” rating.
Risk warning: 210 silicon chip shipments and profits fell short of expectations; semiconductor silicon wafer production capacity and sales fell short of expectations.