Core views
The company achieved revenue/return/deduction of 114.46/3.44/231 million yuan in 2023, +4.29%/+278.5%/+1166.4% year-on-year respectively. In the first quarter of 2024, the company achieved revenue/attribution/deduction of 2,549/0.10/-0.16 billion yuan respectively. Revenue was +7.23% year-on-year. The return to mother was positive, and the deduction did not reduce losses. The company promoted its leading position in consumer batteries, achieved contrarian revenue growth in the face of declining global sales of laptops and mobile phones, and entered the Apple supply chain, and gross margin increased significantly. Power and energy storage batteries have grown, losses have narrowed, focusing on start-stop, drone batteries, etc., and subsequent depreciation was not significant. The company's consumer business is expected to continue to grow, the mobile storage business continues to expand, new customers are expected to achieve profits, and the overall business situation is improving.
Incidents:
The company released its 2023 annual report: in 2023, it achieved revenue/net profit to mother of 114.5/3.44/231 million yuan, +4.3%/+278%/+1166% year-on-year; of these, Q4 achieved revenue/net profit/net profit deducted from non-net profit of 29.1/0.55/ 0.12 billion yuan, +10.2%/794%/-90% YoY.
The company released its 2024 quarterly report: in the first quarter of 2024, it achieved revenue/net profit/net profit deducted from non-net profit of 25.49/0.10/-0.16 billion yuan, +7.2% /-0.16 billion yuan year-on-year, +7.2%/-232% year-on-year. Mainly due to seasonality in the consumer business and the large impact of losses in the mobile storage business.
Comment:
Consumer battery operations are steady, the industry bucked the trend during the downturn, and the gross margin of expanding major customers increased
In terms of structure, the company achieved consumer battery revenue of 10.48 billion yuan in 2023, of which notebook computers achieved revenue of 6.611 billion yuan. With global laptop sales falling 13%, the company's laptop business revenue bucked the trend, and the current market share was 31.1%, the same year on year (ranking second in the world); the mobile phone business achieved revenue of 3.428 billion yuan, and with global mobile phone sales falling 4%, revenue ratio +12.44%, market share 8.18%, +0.75pct year on year (5th place in the world). For the first time during the reporting period, Apple achieved Mass production of mobile phone battery products. The annual production volume was 346.39 million units, and the sales volume was 32.912 million units, with a year-on-year increase of 3.14%.
In terms of profit, the company's gross profit margin for consumer batteries was 27.6%, exceeding 30% in the fourth quarter. It is expected that the unit price and gross profit of major customer products such as Apple will be high. Furthermore, the company's self-supply ratio of PACK reached 35.44% in 2023, an increase of 7 pcts over the previous year, an increase of more than 5 pcts compared to the beginning of the year. At the same time, the company expanded emerging consumer electronics products such as smart wearable devices, drones, smart cleaning appliances, and power tools, effectively increasing the added value of products.
Power and energy storage battery costs and impairment affect performance. The contraction front focuses on start-stop batteries, etc., and customers are expected to continuously expand their profitable mobile storage business to achieve annual revenue of 548 million, an increase of 37.9% over the previous year. The gross profit margin was -15.05%, up 15.79pct year-on-year. Zhejiang Guanyu, the company's power and energy storage battery subsidiary, had revenue of 660 million yuan, an increase of 43.4% over the previous year, operating profit of 780 million yuan, and net profit of 630 million yuan. In terms of power batteries, the company positions low-voltage lithium batteries for automobiles as its own advantageous project and the core business of differentiated competition. It has successively been recognized by many well-known domestic and foreign car companies such as SAIC, Zhiji, and Jaguar Land Rover, and has received fixed letters for various model projects. The company's automotive low-voltage lithium battery products will begin mass shipments in 2023. It is expected that 2024 will usher in large-scale market volume and is expected to become the main source of revenue for the power battery business.
In terms of energy storage batteries, in terms of household storage, the company continues to supply customers such as Sonnen, a leading overseas home storage brand; in terms of large storage, the company participated in the 50MW inverter booster integrated cabin project at Baotang Energy Storage Station in Foshan.
In 2023, the production volume of power and energy storage products was 3.62 million units, with sales volume of 3.07 million units. Sales increased by 43.46% year on year.
Profit forecasting
The estimated 24/25 performance is 598/1,137 million yuan, corresponding to the current PE of 24/13x.