DKEM(SZ:300842) Huaxin Securities·2024-03-16 16:00Investment Rating - The report initiates coverage with a "Buy" rating for the company [6]. Core Insights - The company has experienced rapid revenue growth and has turned profitable, with a reported revenue of 9.603 billion yuan in 2023, representing a year-on-year increase of 154.94% [6][8]. - The company specializes in conductive silver paste for crystalline silicon photovoltaic cells, which is crucial for enhancing the efficiency and output power of solar modules [6]. - The company has established long-term partnerships with well-known downstream manufacturers, gaining recognition from major players in the industry [6]. Revenue and Profitability - The company achieved a net profit of 386 million yuan in 2023, marking a significant turnaround from losses, with a gross margin of 11.14% and a net margin of 3.93% [6][8]. - The report forecasts revenues of 13.679 billion yuan, 16.628 billion yuan, and 19.533 billion yuan for 2024, 2025, and 2026, respectively, with corresponding EPS of 6.42 yuan, 7.77 yuan, and 9.25 yuan [6][8]. Market Position and Product Development - The company is positioned to benefit from the accelerated adoption of N-type cells, with a significant increase in the shipment of TOPCon silver paste, which reached 1,713.62 tons in 2023, a year-on-year increase of 137.89% [6]. - The company has become the first in the industry to sell over 1,000 tons of TOPCon silver paste, indicating a strong market position [6]. - The introduction of LECO technology is expected to enhance the efficiency of TOPCon cells, with anticipated improvements in production processes [6]. Cost Management and Supply Chain - The company is actively increasing the use of domestic silver powder to reduce costs and enhance supply chain security, with over 80% of the silver paste for PERC cells sourced from domestic suppliers [5][6]. - The report highlights the potential for further cost reductions in HJT products, which currently rely on imported silver powder [5]. Future Outlook - The company expects to ship between 2,500 to 3,000 tons of photovoltaic silver paste in 2024, with an increasing proportion of TOPCon silver paste, indicating a positive outlook for both volume and profitability [6].