Description of the event
Jingao Technology released the 2023 Annual Report & 2024 First Quarter Report. In 2023, the company achieved revenue of 81,556 billion yuan, up 11.74% year on year, net profit of 7.039 billion yuan, up 27.21% year on year; 2023Q4 achieved revenue of 21,575 billion yuan, down 8.83% year on month, up 12.73% month on month, net profit of 275 million yuan, down 87.76% year on year and 85.93% month on month; 2024Q1 achieved revenue of 15.971 billion yuan, down 22.02 year on year %, down 25.97% from the previous month; net profit to mother - 483 million yuan.
Incident comments
In 2023, the photovoltaic industry as a whole maintained a high level of prosperity. The company shipped 57.094 GW of battery modules (including 2.156 GW for personal use), +43.63% compared to the same period. Among them, overseas module shipments accounted for about 48%, and distributed shipments accounted for about 27%.
According to statistics from PV InfoLink, an authoritative third-party consulting agency, the company ranked in the top three in the world in terms of component shipments in 2017-2021 and the top four in the world in 2023-2023, ranking among the highest in the industry. By revenue market structure, the domestic share is 46% as the main source. Although Europe's share declined due to industry inventories, it still reached 22%, and America's share of revenue rose to 17%. 2024Q1, the company shipped 16.059 GW of battery modules (including 528 MW for personal use), of which overseas module shipments account for about 62% and distribution accounts for about 29%. In addition, the company accrued asset impairment losses of 258 million yuan, mainly due to inventory depreciation.
In terms of capacity construction, by the end of 2023, the company's module production capacity was over 95 GW, and the production capacity of silicon wafers and batteries was about 90% of the module production capacity, including more than 57 GW of n-type batteries. Overseas layout continues to advance. Vietnam's 2.5GW crystal and chip production was successfully put into operation in 2023, and new construction projects such as Vietnam's 5GW batteries and US 2GW modules are progressing according to plan.
At the profit level, the gross margin of the company's component business increased by 3.97 pct to 18.28% year-on-year in 2023. By market, America's best performing gross margin reached 36.56%. In addition, the profit situation in Asia and Oceania also performed well. The gross margin was 21.10%, and the gross margin in the European market remained around 14%. The company calculated an impairment of 2,306 billion yuan in 2023, mainly for inventory price reduction preparations and fixed asset impairment preparations.
Looking ahead, the company will continue to increase investment in R&D, steadily build new production capacity to meet growing customer needs, and continue to promote vertically integrated production capacity in the industrial chain. By the end of 2024, production capacity will exceed 100 GW in all aspects. Among them, with the full production capacity of 57GW TopCon batteries, the cost is expected to be further reduced, and the company's profit advantage is expected to be reflected. The company's latest n-type Bycium+ (Bycium+) battery mass production conversion efficiency has reached 26.3%, and the process will continue to be improved to ensure the company's profit. In 2024, the company's component shipment target is 85-95GW, a year-on-year increase of nearly 60%.
We expect the company to achieve an attributable net profit of 3.6 billion in 2024, which is 13 times the corresponding PE.
Risk warning
1. Deterioration of the competitive landscape;
2. PV installation falls short of expectations.