Description of the event
On May 7, local time, the company released Hi-MO9, a next-generation component product in Madrid, Spain. Hi-mo 9 components are based on high-efficiency HPBC 2.0 battery technology, with a maximum power of 660W and a conversion efficiency of 24.43%.
Incident reviews
Adhering to differentiated competition, the conversion efficiency of Hi-Mo 9 components reached 24.43%, and the conversion efficiency of HBC batteries reached 27.3%. The company adheres to the BC route and continues to launch differentiated products. The Hi-MO 9 module is equipped with HPBC 2.0 technology, uses the company's own Terry silicon wafers, and combines the company's self-developed composite passivation technology to achieve optimal upgrades in terms of light absorption, photoelectric conversion, and current transmission capacity of the battery, and has high power generation capacity and low BOS cost. Hi-Mo 9 components have an attenuation of ≤ 1% in the first year, linear attenuation ≤ 0.35%. The attenuation performance is better, can withstand harsh outdoor environments with high temperature and humidity, and has excellent reliability. Furthermore, the HBC battery independently developed by the company reached 27.3%, once again breaking the world record. The company maintained the double title of the two major circuit battery efficiency world records for crystalline silicon single junction batteries and crystalline silicon-perovskite laminated batteries.
Inventory depreciation is calculated, and profits are under phased pressure. In 2023, the company achieved operating income of 129.50 billion yuan, +0.4% year-on-year; realized net profit of 10.75 billion yuan, -27.4% year-on-year. In Q4 2023, we achieved revenue of 35.40 billion yuan and net profit to mother of 940 million yuan in a single quarter. In 2024, Q1 achieved operating income of 17.67 billion yuan, or -37.6% year-on-year, and realized net profit to mother of 2.35 billion yuan, or -164.6% year-on-year. Affected by falling prices in the industrial chain and US policies, in 2023, the company prepared a price reduction of 6.76 billion yuan for inventory and fixed assets, of which 5.17 billion yuan was included (including additional inventory price reduction provisions of about 1.35 billion yuan due to long-term stagnation of some products in Hong Kong due to the impact of US policy). In Q1 2024, the company calculated impairment reserves of 2.65 billion yuan for inventory assets and 150 million yuan for impairment of fixed assets, which dragged down the company's performance in the short term.
Shipments continue to grow at a high rate, and the leading position in the industry is stable. In 2023, the company achieved 125.4 GW of monocrystalline silicon wafers (of which 53.8 GW of export sales), +47.5% year over year, the number one monocrystalline silicon wafer shipment volume in the world for 9 consecutive years; achieved 67.5 GW of module shipments (of which 66.4 GW), compared to +44.4% over the same period last year. In 2024, Q1 achieved 26.7 GW of monocrystalline silicon wafer shipments (including 12.4 GW of export sales), +12.3% year over year; achieved 12.9 GW of module shipments (including 12.8 GW of export sales), +16.6% year over year. In addition, Q1 shipped 4.75 GW of HPBC products in 2024, which continued to maintain the growth momentum, which is conducive to increasing the volume of the company's distributed business.
Rational investment in production capacity construction to promote a global layout. By the end of 2023, the company's silicon wafer/battery/module production capacity was 170/80/120 GW, respectively. In the next three years, the company's silicon wafer/battery/module production capacity is expected to reach 200/100/150 GW, respectively. In 2024, the company's silicon wafer shipment target is around 135GW, and the battery+module shipment target is 90-100GW. In order to cope with overseas trade policies, the company actively lays out global production capacity. In the first quarter of 2024, the company's 5GW module joint venture plant in the US was officially put into operation; in addition, projects such as 2.8 GW modules in Malaysia and 3.35 GW batteries in Vietnam were gradually put into operation as scheduled, and construction of the 6.6 GW silicon rod project in Malaysia progressed in an orderly manner.
Investment advice
Against the backdrop of falling prices in the industrial chain and intensifying competition in the industry, the company is a leading company in the industry, with steady growth in shipments, sufficient cash reserves, and differentiated BC technology, which has the ability to resist risks and cross the cycle. We expect the company's net profit from 2024-2026 to be 40.3/67.2/8.16 billion yuan, corresponding to the closing price on May 14, 2024. PE will be 35.4 times, 21.2 times, and 17.5 times respectively, maintaining a “buy-A” rating.
Risk warning
Risk of policy changes; risk of increased industry competition; risk of price fluctuations of products and raw materials; new PV installations falling short of expectations; risk of technological change, etc.