Performance to maintain rapid growth, wind power continues to generate power. The company announced that in the third quarter of 2021, the company achieved a total operating income of 33.419 billion yuan (+ 23.44% yoy), a net profit of 1.866 billion yuan (+ 39.02%yoy), and a net profit of 1.547 billion yuan (+ 22.27% yoy) in the first three quarters. Among them, the total operating income in the third quarter was 10.682 billion yuan (+ 14.62% yoy), the net profit was 518 million yuan (+ 33.48%yoy), and the non-return net profit was 319 million yuan (+ 12.95% yoy). The company's overall revenue maintained rapid growth, of which wind power was still the main source of growth, with wind power revenue growing by about 84% in the first three quarters.
Profitability rose slightly compared with the same period last year, and the cost side was basically stable. During the reporting period, the gross sales margin / net profit margin was 17.09% / 6.08%, respectively, compared with the same period last year, with a slight increase in profitability and a decrease in month-on-month compared with the same period last year.
During the reporting period, the expense rate during the company period was 13.28%, which was-0.45 pct compared with the same period last year. The cost pressure drop mainly came from the management and control of R & D expenses, offsetting the impact of more increases in sales expenses, which resulted from the increase in quality assurance fees calculated according to the proportion of income. During the reporting period, the company's inventory increased by more than 30%, mainly due to better order demand to support the company's continued increase in production.
Power investment repair logic continues to cash in, and new orders continue to grow. In the first three quarters of 2021, the company produced 2677.28 kilowatts (+ 49.21% yoy) of power generation equipment, of which 696.55 kilowatts for hydrogenerator sets / turbogenerators / wind turbines / power station boilers / power station steam turbines, respectively. 261.73 shock 261.73 shock 1679.56 million kilowatts, the logic of power investment benefiting from the continuous growth of electricity consumption is gradually realized. At the same time, during the reporting period, the company's new orders reached 46.983 billion yuan (+ 19.98% yoy), which is expected to grow in the future. Among the new orders, clean and efficient energy equipment / renewable energy equipment / engineering and trade / modern manufacturing services / emerging growth industries accounted for 28.6%, 23.9%, 15.6%, 12.5%, 19.4%, respectively.
Risk factors: power investment is not as expected, raw material prices remain high, in-hand order delivery is not as expected, and the implementation of the "double carbon" goal is not as expected.
Investment suggestion: considering that the growth of electricity demand benefiting from power investment in the "14th five-year Plan" is expected to maintain the boom, especially the continuous increase in the expectations of nuclear power, pumped storage and wind power installation in base-load power, the company's net profit forecast for 2021-2023 is 24.82pm 29.16pm 3.091 billion yuan (the original forecast is 23.79pm 2768885 million yuan), corresponding to the EPS of 0.800.93pm 0.99 yuan. The current price of A shares corresponds to a PE of 22.2, 19.1, and 18.0 times. Combined with the valuation level of the company during the large-scale power construction stage in history, the company's A shares 25x PE in 2022 is given as a reasonable valuation, and H shares 15x PE is given as a reasonable valuation considering the differences in H share valuation system. The corresponding A shares and H shares are priced at 23 yuan and 17 Hong Kong dollars respectively, maintaining a "buy" rating.