Jinlang Technology, an inverter giant with continued strong performance

This is the 492 original article of the Big Bang of New Energy. The article only records the idea of the Big Bang of New Energy and does not constitute investment suggestions. The author has no group, no charge for stock recommendation and no financing for customers.
Jinlang Technology has been tracked several times by the New Energy Big Bang before. This is a company with a very impressive name at first sight. From the performance before, the company is also excellent enough. The third quarter report is also out. Continue to track it briefly.
01 Brief analysis of the third quarter report of Jinlang Technology in 2022
In the first three quarters, the company achieved revenue of 4.167 billion yuan, up 80.86% year on year, and net profit attributable to the parent company was 703 million yuan, up 93.75% year on year. Non-net profit deducted was 714 million yuan, up 136.85% year on year. Q3 achieved a revenue of 1.725 billion yuan in a single quarter, an increase of 102.91% year on year and a year-on-year increase of 28.83%. Net profit attributable to the parent company was 305 million yuan, an increase of 144.37% year on year and a year-on-year increase of 30.34%. Deduct 345 million yuan from non-profits, an increase of 247.84% year on year, and a significant increase of 50.95% month on month. Q3 gross profit rate was 36.78%, with a year-on-year increase of 9.87 percentage points, a month-on-month increase of 3.93 percentage points, a net profit rate of 17.69%, a year-on-year increase of 3.00 percentage points, and a month-on-month increase of 0.23 percentage points.
It has to be said that both the absolute value and growth rate of Q3 in the first three quarters and in the single quarter look very amazing. Just because the official performance of the third quarter report falls below the median of the previous performance forecast, and the previous performance expectation of the institution for this year is about 1 billion net profit, so the third quarter report is just in line with the market expectation.
However, from Leo’s personal point of view, the third quarter report of Jinlang Technology exceeded expectations, especially compared with the performance of inverter peers, Jinlang’s performance is undoubtedly solid enough.
The substantial year-on-year and month-on-month growth of gross profit rate indicates that the shipment of energy storage products is much faster than that of other products, and the proportion of overseas market sales has also increased, and the company’s product structure has continued to improve.
In the last year, especially when the performance base of this year’s Mid-quarter report is relatively high, the third-quarter report still achieved a significant month-on-month growth, which is completely different from many third-quarter reports with the same mid-quarter report.
In addition, compared with the medium report, there are still 50.27 million yuan in the Q3 of Jinlang due to the loss of forward settlement and sales of foreign exchange caused by the fluctuation of exchange rate, which has also slowed the performance of Q3, otherwise the performance would be better.
Not to mention, the company’s performance growth was also affected by the shortage of IGBT.
In the first half of the year, many inverter companies have been affected by the shortage of IGBT, and Jinlang Technology has also encountered this problem. Compared with Deye’s firm use of domestic IGBT, Deye’s domestic IGBT has accounted for half of the shipments. Although Jinlang Technology has also begun to try to import domestic IGBT, it is obviously much more cautious, and has not yet introduced it on a large scale.
However, there is no shortage of orders. Q3 contract liabilities reached 126 million yuan, up 40.98% from the beginning of the year, and up 44% from the mid-month report. Previously, the company said at the performance exchange meeting that the company’s orders could not be completed in 4 to 5 months, and from Q3, the orders continued to increase rapidly.
In order to cope with the continuous orders brought by the outbreak of the industry, the company is also increasing the stock of raw materials. The inventory of Q3 reached 1.9 billion, nearly 200 million more than the reported amount.
In addition, the capacity expansion of raised capital is also accelerating, and the number of projects under construction has also increased by 250 million compared with that reported in the report.
02 What do you think of Jinlang Technology?
I don’t know what you think of Jinlang Technology. Leo has a very obvious feeling after tracking it down: Jinlang Technology is like a group of students who have good grades in a class, but are not the top ones. It seems that they never show up, but always follow their own pace.
Such people may not be the best, but they will never be the worst. Especially as long as they enter good industries and excellent platforms, they will often have good achievements.
The same is true of Jinlang, which has never been the top in the industry, but its past performance growth, R&D investment, capacity expansion and so on are also above the middle level, and it is rare that there is little negative news.
In fact, the ultimate ceiling of such a company depends mainly on the ceiling of the industry. Fortunately, the explosion of the new energy industry, whether it is the rapid explosion of the installed capacity of PV after the introduction of the affordable grid, or the rapid increase in the penetration of energy storage in the past two years, Jinlang has fully benefited from this process.
For example, in Q3, energy storage accounts for 25% of the total shipments, and the proportion is increasing. The proportion of energy storage for overseas shipments is higher, and the value content is even higher, accounting for 40% of domestic and 60% of foreign shipments.
For a company like Jinlang Technology, there is no need to worry too much about its growth. In the past, it has exceeded the average growth rate of the industry, which has proved the company’s advantages in industry competitiveness.
For such companies, the focus should be on the development of the industry? Especially, what is the future growth space of the industry?
As long as the development space of the industry is large enough, there is no need to worry about the growth of the company. It will strive to outperform the industry itself. Investors only need to regularly track the company’s performance and the basic situation of the industry, and confirm that the company’s competitiveness in the industry is no problem, and that the industry has enough development space.