Sungrow Power Supply(SZ:300274)2024-04-24 03:00Investment Rating - The report assigns a "Buy" rating to the company, 阳光电源 (300274 CH), with a target price of RMB 124.50, indicating a potential upside of 32.5% from the current closing price of RMB 93.99 [1][10]. Core Insights - The company experienced a significant revenue and net profit growth in 2023, with revenues reaching RMB 887 billion and net profits at RMB 94.4 billion, marking year-on-year increases of 79% and 162% respectively. The fourth quarter of 2023 saw revenues of RMB 258 billion and net profits of RMB 22.2 billion, reflecting growth of 43% and 45% year-on-year [1][2]. - The first quarter of 2024 showed revenues of RMB 126 billion and net profits of RMB 21 billion, with net profits exceeding expectations by 5%. The gross margin reached a record high of 36.7%, up 8.7 percentage points year-on-year [1][2]. - The company has maintained a strong performance in its inverter segment, with revenues of RMB 277 billion in 2023, a 61% increase year-on-year. The gross margin for inverters was 37.9%, up 5.5 percentage points [2]. - The energy storage systems segment generated RMB 178 billion in revenue, a 76% increase, although the market share declined due to the company's strategy of avoiding low-priced domestic orders. The gross margin for energy storage systems was 37.5%, up 14.2 percentage points year-on-year [2]. - The report indicates that the company is expected to see a rebound in market share in 2024, with projected shipments exceeding 20 GWh, representing over 90% growth [2]. Financial Summary - For the fiscal year ending December 31, 2023, the company reported revenues of RMB 72.251 billion, with a year-on-year growth of 79.5%. The net profit for the same period was RMB 9.44 billion, reflecting a 162.7% increase [5][11]. - The earnings per share (EPS) for 2023 was RMB 6.36, with a projected EPS of RMB 7.33 for 2024, indicating a growth of 15.3% [5][11]. - The company’s price-to-earnings (P/E) ratio is currently at 14.8, which is significantly lower than the average of the past five years, suggesting potential for valuation recovery [2][5].