Longi(601012) 华创证券·2024-05-08 13:02Investment Rating - The report downgrades the investment rating of LONGi Green Energy Technology Co Ltd (601012) to "Recommend" with a target price of 22.83 RMB [1] Core Views - LONGi's 2023 revenue reached 129.498 billion RMB, a slight increase of 0.39% YoY, while net profit attributable to shareholders dropped by 27.41% to 10.751 billion RMB [1] - In Q1 2024, the company reported a revenue decline of 37.59% YoY to 17.674 billion RMB and a net loss of 2.35 billion RMB, marking a significant downturn [1] - The company's gross margin improved to 18.26% in 2023, up by 2.88 percentage points, but dropped sharply to 8.89% in Q1 2024 [1] Business Performance - LONGi achieved a silicon wafer shipment of 125.42GW in 2023, maintaining its global leadership for nine consecutive years, with a 47.45% YoY growth [2] - The company's module shipments reached 67.52GW in 2023, a 44.40% increase YoY, with external sales accounting for 66.44GW [2] - By the end of 2023, LONGi's silicon wafer, battery, and module capacities stood at 170GW, 80GW, and 120GW respectively, with plans to expand to 200GW, 100GW, and 150GW in the next three years [2] Financial Impact - LONGi recorded a significant impairment loss of 6.757 billion RMB in 2023, including 5.171 billion RMB for inventory write-downs, partly due to US policy impacts causing long-term port delays [2] - In Q1 2024, the company further recognized an impairment loss of 2.814 billion RMB, primarily from inventory write-downs [2] Strategic Development - LONGi is focusing on BC (Back Contact) technology, with 29GW and 4GW HPBC battery capacities in Xianyang and Taizhou already operational, achieving a monthly shipment scale exceeding 2GW [2] - The company has developed the second-generation HPBC product, expected to outperform TOPCon modules by 5% in power output and increase power generation by 6.5%-8% over the lifecycle, with a planned launch in H2 2024 [2] - LONGi is also leading in green hydrogen technology, with its electrolyzers achieving a DC power consumption of 4.0kwh/Nm³ and a single-cell capacity of up to 3000Nm³/h, supported by a 2.5GW alkaline electrolyzer capacity by the end of 2023 [2] Financial Forecast - The report revises LONGi's net profit forecast for 2024-2026 to 4.040 billion RMB, 7.523 billion RMB, and 9.491 billion RMB respectively, down from previous estimates of 13.82 billion RMB and 17.41 billion RMB for 2024 and 2025 [2] - The current market valuation implies a PE ratio of 35x, 19x, and 15x for 2024-2026, with a target price of 22.83 RMB based on a 23x PE for 2025 [2] Market Performance - LONGi's stock price has underperformed the CSI 300 index by 45% over the past 12 months, with a current price of 18.77 RMB as of May 8, 2024 [3][5]