Event
Zhejiang Xinneng released the third quarter report of 2022, from January to September 2022, the company realized operating income of 3.639 billion yuan, an increase of 51.22% over the same period last year, and a net profit of 861 million yuan belonging to shareholders of listed companies, an increase of 54.96% over the same period last year.
In the third quarter of 2022, the operating income was 1.131 billion yuan, an increase of 11.02% over the same period last year. The net profit attributed to shareholders of listed companies was 168 million yuan, down 44.57% from the same period last year.
Comment
The company's performance has achieved year-on-year growth, and its profitability is still bright.
In the first three quarters of 2022, the company achieved operating income of 3.639 billion yuan, an increase of 51.22% over the same period last year. The net profit belonging to shareholders of listed companies was 861 million yuan, an increase of 54.96% over the same period last year. The company's performance increased year-on-year, mainly due to the commissioning of new wind power projects and the acquisition of hydropower project assets, and the total installed capacity increased compared with the same period last year, which improved the corresponding operating income and operating performance. In the third quarter of 2022, the company realized operating income of 1.131 billion yuan, an increase of 11.02% over the same period last year; the net profit attributed to shareholders of listed companies was 168 million yuan, down 44.57% from the same period last year, mainly due to the decrease in power generation of the company's hydropower projects in the third quarter compared with the same period last year. In addition, the company's sales gross profit margin in the first three quarters of 2022 was 58.81%, down 2.18% from the same period last year, and the gross profit margin decreased slightly, mainly due to the increase in operating costs; the net sales profit margin was 32.56%, an increase of 14.56% over the same period last year, and the profitability was still bright.
The installed capacity continues to increase, and the water scenery advances steadily.
The company has formed a coordinated development pattern of the three major industries of "scenery and water", and the complementary advantages of scenery and water resources are highlighted. Specifically, wind energy resources and hydropower resources complement each other in seasonal distribution, while light energy resources and hydropower resources complement each other in regional distribution. The coordinated development of the three major industries provides a strong guarantee for the stable growth of the company's operating benefits. The company continues to develop new energy power generation projects, the holding capacity continues to increase, and new wind power projects are put into production and hydropower project assets are acquired, leading to a corresponding improvement in the company's operating performance. In addition, the company relies on the existing industrial layout, focuses on superior resources, opens a wide range of cooperation ways and channels, focuses on key areas and major projects, goes all out to reserve resources for the company's development, and further promotes the coordinated development of water and scenery.
Profit forecast
We estimate that from 2022 to 2024, the company will achieve operating income of 4.308 billion yuan (year-on-year growth of 48.07%), 60.02 yuan and 7.602 billion yuan, with a compound growth of 37.73% in the next three years based on 2021. Net profit attributable to the parent company is 9.16,15.76 and 1.944 billion yuan respectively. The total share capital is 2.08 billion shares, corresponding to RMB 0.44,0.76 and RMB 0.93 for EPS. On October 28, 2022, the stock price was 11.37 yuan, corresponding to a market capitalization of 23.65 billion yuan, and the PE from 2022 to 2024 was about 26, 15 and 12 times.
At present, the company is in the stage of rapid development. by seizing the "window period" of renewable energy development and opening up a wide range of project cooperative development channels, the company has realized the transformation from a single hydropower industry to a "Fengfeng Shui" multi-industry coordinated development. new energy business has a layout in key areas of the country, and the company's performance growth momentum is strong. To sum up, we still maintain the "overweight" rating.
Risk hints: the progress of new energy projects is not as expected, renewable energy subsidies lag behind, and water and landscape resources are not as expected.