Incident: The company released its 2022 annual report, achieving revenue of 1.79 billion yuan for the whole year, an increase of 14.8% after the adjustment; the net profit of the mother was 730 million yuan, an increase of 7.0% year-on-year after the adjustment.
Growth in electricity generation and electricity sales will drive performance improvement in 2022. In 2022, the company achieved revenue of 1.79 billion yuan, an increase of 14.8% over the previous year; the net profit returned to the mother was 730 million yuan, an increase of 7.0% year-on-year after adjustment. In 2022 Q4, revenue reached 660 million yuan, an increase of 14.3% over the previous year, an increase of 140% over the previous month; the net profit of the mother was 280 million yuan, an increase of 2.8% over the previous year and an increase of 762% over the previous month. Total power generation for the full year of 2022 was 3.21 billion kilowatt-hours, an increase of 17.7% over the previous year, and the revenue of the wind power business was 1.73 billion yuan, an increase of 17.9% over the previous year, contributing to a steady increase in annual performance.
The number of hours used for wind power is higher than the average in Fujian Province, and the location advantage of wind power installation is obvious. The average utilization hours of the company's Fujian Lufeng/Fujian Haifeng/Wind Farm in 2022 were 3328/4038 hours respectively, +298/-186 hours compared to the Fujian average of 3132h. By the end of 2022, the company's grid-connected installed capacity was 957,000 kilowatts, including 61.1/296,000 kilowatts of onshore and offshore wind power, respectively. The annual power generation capacity of the company's wind power project ranked among the highest in Fujian Province. By the end of 2022, the company's installed capacity of wind power in Fujian Province was 798,000 kilowatts, of which the installed capacity of onshore and offshore wind power was 50.2/296,000 kilowatts respectively, accounting for 10.8% of the installed scale of wind power in Fujian Province, and continued to maintain a large market share and strong competitiveness in the renewable energy business field in Fujian Province.
The Pinghai Bay Phase III has already met the injection conditions, and the installed scale of wind power is expected to increase further. The Putian Pinghai Bay Offshore Wind Farm Phase III 308,000 kilowatt project was put into operation at the end of 2021. It meets the conditions for stable commissioning, profit within a full fiscal year, and no compliance issues. The Pinghai Bay Phase III project is expected to begin injecting into the company this year. Furthermore, during the “14th Five-Year Plan” period, Fujian Province plans to develop an additional 10.3 million kilowatts of offshore wind power and add 4.1 million kilowatts connected to the grid. Tendering for the second batch of offshore wind projects in Fujian Province is about to begin. The company's wind power installations have location advantages in Fujian Province. The annual power generation capacity of wind power projects is among the highest in Fujian Province, and the installed scale is expected to increase further.
Profit forecasts and investment recommendations. The company's EPS for 23-25 is expected to be 0.43 yuan, 0.49 yuan, and 0.54 yuan respectively, net profit of the mother is 8.3/93/1.03 billion yuan, and the CAGR for 23-25 is 12.2%. Considering the continuous injection of high-quality assets and the smooth connection of the company's projects to the grid, we gave the company 15 times PE in 2023, corresponding to the target price of 6.45 yuan, maintaining the “buy” rating.
Risk warning: Risks such as asset injection falling short of expectations, rising wind abandonment rates, lagging subsidies, and fluctuations in electricity prices