DMEGC(002056) 海通证券·2024-03-10 16:00Investment Rating - The investment rating for the company is "Outperform the Market" [1][3] Core Views - The company achieved steady revenue growth in 2023, with total revenue reaching 19.721 billion yuan, a year-on-year increase of 1.39%, and a net profit attributable to shareholders of 1.816 billion yuan, up 8.80% year-on-year. The non-recurring net profit grew by 26.58% year-on-year to 2.025 billion yuan. The photovoltaic segment saw rapid profit growth, while the magnetic materials segment maintained stable profitability, and the lithium battery segment experienced a decline in profitability [2][3][5]. Summary by Sections Financial Performance - In 2023, the company reported total revenue of 19.721 billion yuan, a slight increase of 1.39% year-on-year. The net profit attributable to shareholders was 1.816 billion yuan, reflecting an 8.80% increase year-on-year. The non-recurring net profit was 2.025 billion yuan, marking a significant growth of 26.58% year-on-year. The company faced asset impairment and fair value changes that impacted profits, totaling 261 million yuan [2][3][5]. Photovoltaic Segment - The photovoltaic segment achieved sales of 9.95 GW in 2023, a year-on-year increase of 24.27%, with profits nearly doubling. The company has an internal production capacity of 14 GW for photovoltaic cells and 12 GW for photovoltaic modules. It has expanded its capacity with an additional 6 GW of TOPCon high-efficiency cells and 5 GW of TOPCon high-efficiency modules, along with 2 GW of TOPCon cells under construction. The company has also made significant strides in the domestic market, surpassing 100 MW in distributed project development and securing approximately 1 GW in downstream power station development indicators [3][5]. Magnetic Materials Segment - The magnetic materials segment generated revenue of 3.74 billion yuan in 2023, a decrease of 11.03% year-on-year, but with an improved gross margin of 26.49%, up 2.79 percentage points. Despite a decline in terminal demand for permanent magnets, the company increased its market share. The soft magnetic materials segment focused on high-end customers and actively developed new products for applications in the new energy vehicle and photovoltaic sectors [3][5]. Lithium Battery Segment - The lithium battery segment reported revenue of 2.051 billion yuan, a year-on-year increase of 31.38%, with a shipment volume of 340 million units, up 75.36% year-on-year. While many industry players maintained low operating rates and profitability declined, the company achieved an industry-leading operating rate and increased its market share. It is also exploring new product applications in home storage, balcony storage, and commercial storage [3][5]. Profit Forecast and Valuation - The company is expected to achieve net profits attributable to shareholders of 1.830 billion yuan, 2.214 billion yuan, and 2.585 billion yuan for the years 2024 to 2026, representing year-on-year growth rates of 0.8%, 21.0%, and 16.7%, respectively. Based on comparable company valuations, a price-to-earnings (PE) ratio of 14-16 times for 2024 is suggested, corresponding to a reasonable value range of 15.75 to 18.00 yuan [3][5].