Main points of investment
Event: Jiangsu Xinneng released its three-quarter report for 2022, which showed that the company achieved a total operating income of 1.517 billion yuan in the first three quarters of 2022, with a year-on-year net profit of 381 million yuan, or-2.89% compared with the same period last year. Affected by the decline in land wind power generation, the company's net profit in the third quarter was 76 million yuan,-15.92% year-on-year, gross profit margin year-on-year-0.89pct, month-on-month-13.74pct, net profit rate-4.53pct, month-on-year-17.70pct. Combined with the operating data, our comments are as follows:
Wind resources in Jiangsu Province weakened, and profit margins fell in the third quarter: due to the impact of weaker wind resources in Jiangsu in the first and third quarters than in the same period last year, the company's power generation efficiency decreased. Land wind power generation in the first three quarters was-17.09% compared with the same period last year, of which Q3 was-24.04% compared with the same period last year. Due to the influence of industry policies and fuel market, the power generation of biomass power generation projects with poor performance in the past dropped sharply, with the first three quarters compared with the same period last year. Thanks to the additional power generation of the Hallows sea breeze project and the photovoltaic project, the company's total power generation increased slightly in the first three quarters, + 1.89% compared with the same period last year. We believe that distributed photovoltaic and offshore wind power may be the main growth drivers of the company in the future; by the end of 2022H1, the company's clear new energy projects include Dafeng 0.85GW Haifeng project, Shanxi, Henan and other photovoltaic projects totaling about 0.37GW.
Cash flow improved significantly: the net operating cash flow of the company in the first three quarters was 698 million yuan, which was + 36.6% compared with the same period last year. The sharp improvement in the company's cash flow is mainly due to: 1) the increase in cash inflows: the superimposed subsidy rebates for electricity receivables increased in the new projects, and the operating cash inflows in the first three quarters were + 10.66% compared with the same period last year. 2) decrease in cash outflow: some biomass projects have been suspended after the expiration of reasonable utilization hours, and due to the continuous rise of biomass fuel, the company has shut down non-heating projects; thanks to the decrease in fuel procurement, operating cash outflow in the first three quarters was-11.22% compared with the same period last year.
In addition, the company's accounts receivable reached 2.379 billion yuan, an increase of 490 million yuan over the end of 2021, mainly due to the fact that the green power subsidy has not yet been paid in time.
Investment suggestion: as a green power enterprise in Jiangsu Province, the company fully benefits from the development of new energy industry in the province, while generating offshore wind power track, it is expected to realize the expansion of various project resources by virtue of regional resource endowment. In addition, combined with the commissioning of Rudong H2 offshore wind power in 2021, the 40% equity injection of Datang Guoxin Binhai Wind Project and other business expansion and adjustment, we adjust the net profit of homing from 2022 to 2024 to 6.36pm 8.42 / 1.098 billion yuan respectively, with a growth rate of + 107.2%, + 32.4% and + 30.5%, respectively, corresponding to the closing price PE of November 4, respectively. Maintain the "prudent overweight" rating.
Risk tips: 1, the company's follow-up new energy projects are not as expected; 2, offshore wind power installation costs are less than expected; 3, financing costs are upward; 4, electricity price fluctuation risk.