JA SOLAR(SZ:002459) Changjiang Securities·2024-09-09 06:10Investment Rating - The investment rating for the company is "Buy" and is maintained [5]. Core Views - The company reported a revenue of 37.357 billion yuan in H1 2024, a year-on-year decrease of 8.54%. The net profit attributable to the parent company was -0.874 billion yuan. In Q2 2024, revenue reached 21.385 billion yuan, showing a year-on-year growth of 5.02% and a quarter-on-quarter increase of 33.89%, with a net profit of -0.391 billion yuan [5][6]. - The company leveraged its global marketing service network and brand advantages to enhance market expansion, achieving a battery module shipment of over 38 GW in H1 2024, with approximately 54% of shipments going overseas. In Q2 2024, the shipment was around 22 GW. However, the company faced profit pressure due to intensified competition in the photovoltaic industry and price adjustments along the supply chain, resulting in a Q2 gross margin of 3.9%, which decreased quarter-on-quarter [6]. - Financially, the company recognized an asset impairment loss of 0.434 billion yuan in H1 2024, primarily due to inventory depreciation, with Q2 accounting for 0.176 billion yuan. The company also recognized a credit impairment loss of 0.086 billion yuan, mainly for accounts receivable bad debt provisions, with Q2 being 0.066 billion yuan. Other income for H1 2024 was 0.22 billion yuan, including 0.141 billion yuan from government subsidies. The company improved its expense control, reducing the expense ratio quarter-on-quarter. By the end of H1 2024, the company had added 24.5 billion yuan in borrowings, raising the debt-to-asset ratio to 70.95%. As of June 30, 2024, the company had 24.9 billion yuan in cash, significantly improving liquidity, with a positive operating cash flow of 1.684 billion yuan in Q2 2024 [6]. - The main industry chain's profitability is expected to bottom out, with the least capacity in the TOPCon battery segment. As demand season approaches, the recovery of battery module profitability is anticipated to be the most evident. By the end of 2024, the company's module capacity is expected to exceed 100 GW, with silicon wafer and battery capacity reaching 80% of module capacity, including 57 GW of N-type batteries with a mass production conversion efficiency of 26.5%. The company continues to increase R&D investment, with H1 2024 R&D expenditure at 1.959 billion yuan, accounting for 5.24% of revenue, further strengthening its technological advantage. The company's latest price-to-book ratio is only 1, indicating a significant margin of safety, and it continues to be a key recommendation [6].