Longi(SH:601012) Ping An Securities·2024-09-02 23:39Investment Rating - The investment rating for the company is "Recommended (Maintain)" [1] Core Views - The company reported a significant decline in revenue and net profit for the first half of 2024, with revenue of 38.529 billion yuan, down 40.41% year-on-year, and a net loss of 5.243 billion yuan, a decrease of 157.13% year-on-year [3][4] - The company faced substantial asset impairment losses, primarily due to inventory write-downs, which were a core reason for the large losses in the first half of the year [4][5] - Despite the challenges, the company achieved an 18% year-on-year increase in module shipments, with significant growth in the Asia-Pacific region [4][5] Financial Summary - The company’s total revenue for 2022 was 128.998 billion yuan, with a slight increase to 129.498 billion yuan in 2023, but a projected decline to 88.738 billion yuan in 2024, representing a year-on-year decrease of 31.5% [3] - The net profit for 2022 was 14.812 billion yuan, which fell to 10.751 billion yuan in 2023, and is expected to be a loss of 7.497 billion yuan in 2024 [3] - The gross margin decreased significantly from 18.3% in 2023 to a projected 7.4% in 2024, indicating pressure on profitability [3] - The company’s return on equity (ROE) is projected to be -11.9% in 2024, reflecting the financial difficulties faced [3] Market Position and Strategy - The company is focusing on expanding its BC battery module production capacity, with plans to reach 70GW by the end of 2025 [6] - The introduction of the Hi-MO 9 module, which boasts a power output of 660W and a conversion efficiency of 24.43%, is expected to enhance the company's competitive edge [6] - The company has successfully established a smooth supply chain for North America, with a new 5GW module factory now operational [4][6] Future Outlook - The company’s projected net profits for 2024, 2025, and 2026 are -7.497 billion yuan, 1.670 billion yuan, and 6.318 billion yuan, respectively, indicating a potential recovery in profitability in the following years [5][6] - The dynamic price-to-earnings (P/E) ratios for the next three years are expected to be -13.3, 59.8, and 15.8, reflecting the anticipated volatility in earnings [5]