Main points of investment
Event: China Min Energy released its three-quarter report in 2022, the announcement showed that the company achieved a total operating income of 1.178 billion yuan in the first three quarters of 2022, + 15.12% year-on-year, 451 million yuan in net profit, + 9.76% in the same period last year, and 59.82% gross profit in the first three quarters of 2022, year-on-year-2.90pct. Affected by the decline in power generation, the company's revenue in the third quarter was 255 million yuan,-5.52% compared with the same period last year, and the net profit was 32 million yuan,-56.61% compared with the same period last year. Gross profit margin year-on-year-16.73pct, month-on-month-24.57pct. Combined with the operating data, our comments are as follows:
Business data analysis: the number of hours of wind power utilization in Fujian Province declined in the third quarter, and the company's power generation was-5.58% compared with the same period last year. By the end of the third quarter of 2022, the company had accumulated 2.047 billion kilowatt-hours of electricity generation, + 16.12% year-on-year, and 1.988 billion kilowatt-hours of Internet power, + 15.86% year-on-year. Q3 completed 437 million kilowatt-hours of electricity generation,-5.58% year-on-year, and the growth rate of power generation in a single quarter turned negative for the first time this year. Poor wind in Fujian Province is the core factor of the company's declining performance; in July and August, Fujian wind power utilization hours were 154 and 82 hours respectively, compared with-43 hours and-51 hours last year. Affected by this, the company's wind power projects in Fujian region generated electricity in the third quarter-10.75% compared with the same period last year. The accelerated pace of superimposed installation and production increases operating costs, and the company's Q3 net interest rate is year-on-year-15.60pct. Considering the influence of seasonal factors, we believe that the company's wind power generation may increase in the fourth quarter, with the rolling production of new production projects and Fujian wind resource endowment advantages in the future, the company's performance is expected to improve as a whole.
Marginal outlook: the shareholder's project is progressing smoothly, waiting for the injection of 2.41 million kilowatts of assets. According to the commitment of the company's controlling shareholder investment group, when Putianping Bay Offshore Wind Power Phase III (308 million kilowatts), Mintou pumped storage (1.2 million kilowatts), Ningde Xiapu Offshore Wind Farm A, B, C (900,000 kilowatts) and other projects are profitable and other conditions are met, the opportunity will be injected into the listed company. If it is fully injected in the future, the installed capacity of the company is expected to increase to 3.3653 million kilowatts, an increase of 251.54% over the final installation of 2022H1. According to the company announcement, the Pingwan Phase III project has been put into production, the Xiapu area B project was approved last year, and the shareholder's project is progressing smoothly. Considering the late asset injection, the company is expected to achieve rapid improvement in performance in the future.
Investment suggestions: 1) as a local sea breeze operator in Fujian Province, benefiting from the advantages of local resource endowment, the utilization hours of unit power generation are higher than the national average all the year round; 2) the project injection company under shareholders is expected to bring large-scale growth in installed capacity in the future. We maintain the company's 2022-2024 homing net profit forecast of 8.62 12.75 / 1.487 billion yuan respectively, with a performance growth rate of + 31.3%, 48.0% and 16.5%, respectively, corresponding to the closing price of 12.3x/8.3x/7.1x on November 4, maintaining a "prudent overweight" rating.
Risk hint: shareholder project injection into the company is not as fast as expected, electricity price fluctuation risk, power consumption risk, macroeconomic risk.