Flat(601865) Soochow Securities·2024-10-31 00:32Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's Q3 2024 earnings are under pressure, indicating that the bottom of the cycle has been reached [3] - The report suggests that the rapid decline in glass prices has led to a downward adjustment in profit forecasts, but anticipates a recovery in glass prices as demand improves [4] Financial Performance Summary - For Q1-Q3 2024, the company reported revenue of 14.6 billion yuan, a year-on-year decrease of 8.1%, and a net profit attributable to shareholders of 1.3 billion yuan, down 34.2% year-on-year [2] - The gross margin for Q1-Q3 2024 was 19%, a decrease of 2.2 percentage points year-on-year, while the net profit margin was 8.9%, an increase of 3.5 percentage points year-on-year [2] - In Q3 2024, revenue was 3.91 billion yuan, down 37% year-on-year, with a net profit of -200 million yuan, reflecting a significant decline [2][3] Sales and Production Insights - The company sold approximately 1.0-1.1 billion square meters of photovoltaic glass in Q1-Q3 2024, with Q3 sales at 300-350 million square meters, remaining stable quarter-on-quarter [3] - The average price for Q3 2024 was estimated at 10-12 yuan per square meter, a decrease of 3-5 yuan from the previous quarter due to increased inventory and reduced production [3] Capacity and Inventory Management - As of September 2024, the company's total production capacity was 23,000 tons per day, with 2,600 tons undergoing cold repairs, representing about 20% of capacity [3] - The company currently holds approximately 25 days of inventory, with future cold repairs and capacity adjustments dependent on market conditions [3] Cash Flow and Expenditure - Operating cash flow for Q1-Q3 2024 was 3.02 billion yuan, with Q3 cash flow at 1.27 billion yuan, reflecting a year-on-year increase of 54.2% [4] - Capital expenditures for Q1-Q3 2024 totaled 4.13 billion yuan, a year-on-year increase of 39.6%, with Q3 capital expenditures at 1.52 billion yuan [4] Profit Forecasts - The profit forecasts for 2024-2026 have been adjusted downward due to the rapid decline in glass prices, with expected net profits of 1.16 billion yuan in 2024, 2.45 billion yuan in 2025, and 3.68 billion yuan in 2026 [4]