Event: the company released a quarterly report, Q1 in 2023, operating income of 433 million yuan, year-on-year + 16.36%, return to the mother net profit of 29 million yuan, year-on-year + 131.61%.
The revenue side has achieved steady growth over the same period last year, the logic of flange volume and price rise has been initially realized, and the new bearing products have contributed to the income increment. From an industry point of view, according to the data of Xinjiang Goldwind Science & Technology's official website, wind power increased by public tender 98.5GW in 2022, with a year-on-year increase of + 82%, of which land and sea wind increased by 83.8% and 14.7GW respectively, which were + 63% and + 427% respectively compared with the same period last year. Taking into account the wind power installation cycle, the high level of bidding in 2022 plays a guiding role in accelerating the installation of new units in 2023. From the company's point of view, ① wind power flange: as the wind power project starts to recover, the demand is up, the overall volume and price level of the flange has been improved; ② wind power bearings: new products contribute to a certain revenue increment, taking into account the off-season of wind power installation, new shipments may be less, mainly due to the revenue recognition of delayed 2022Q4 shipments. Looking forward to the whole year of 2023, we expect that after entering the peak installation season in the second half of the year, the company is expected to usher in an upward inflection point in revenue and profits. On the one hand, the proportion of high-price and large-size sea breeze flanges is expected to increase, demonstrating the company's capacity / processing advantages; on the other hand, after the completion of the capacity climbing of the bearing project, the increase in shipments is expected to reflect the scale effect.
The downward cost of raw materials promotes profit margin improvement, and there is still room for structural improvement: Q1 in 2023, the company's overall gross profit margin is 14.25%, year-on-year + 2.84pct, month-on-month + 1.01pct; net profit rate 6.76%, year-on-year + 3.36pct, year-on-year + 0.27pct. From the expense point of view, the period expense rate is 6.26%, year-on-year-1.40pct, sales, management, R & D, and financial expense rates are-0.05,0.19,+ 0.43 and-1.59pct, respectively, and the overall cost control is good. We judge that the profit improvement is mainly due to the downward overlay flange price repair of steel costs, and the profitability of the core business wind power flange is the first to be repaired; for the whole year, the proportion of sea breeze flange shipments is expected to increase. after the large-scale effect of the bearing project appears, the profit increment is contributed, and the product structure optimization is expected to further improve the profitability.
Investment advice:
We estimate that the company's operating income from 2023 to 2025 will be RMB 38.0 billion, with a year-on-year growth rate of 95.6%, 41.2%, 30.5%, and net profit of 4.1, 660, 950 million, and 331.1%, 62.7, and 43.3%, respectively, respectively, and the corresponding PE will be as much as 22-13-9. The sea breeze flange advantage has the expansion potential, the bearing / gear deep processing project opens the growth space, the profit level is expected to repair, according to the segment valuation method, the flange and bearing business will be given 20,35 times PE in 2023, the comprehensive PE is about 26.9 times, corresponding to the 6-month target price of about 25 yuan, maintaining the "buy-A" rating.
Risk tips: the new installation of the industry is not as expected; the shipment of large-size flanges is not as expected; the shipment of new products is not as expected; the investment of fund-raising projects leads to large expenses; the upside risk of raw material costs.