Incidents: In 2022, the company achieved revenue of 4.18 billion yuan, an increase of 2.5% over the previous year; achieved net profit of 230 million yuan, a decrease of 42.1% over the previous year; after deducting net profit of 200 million yuan, a year-on-year decrease of 47.1%. In 2023Q1, the company achieved revenue of 501 million yuan, an increase of 16.8% over the previous year; achieved net profit of 0.5 billion yuan to the mother, an increase of 104.4% over the previous year; after deducting net profit of 50 million yuan from the non-return mother, an increase of 116.7% over the previous year.
The wind power industry has been sluggish for a short period of time, and tower profits are under pressure. 2022 was the first year of Haifeng's parity. The company's fan tower business achieved revenue of 3.6 billion yuan, an increase of 1.8% over the previous year. The gross margin was 10.5%, a year-on-year decrease of 5.1 pp, mainly due to a slowdown in downstream business commencement, a decline in fan installation capacity, and a continuous decline in fan industry chain prices. In terms of production and sales, the company achieved 442,000 tons of fan towers and achieved sales of 428,000 tons. It is expected that 2023 will benefit from an increase in installed fan capacity, and the company's tower sales are expected to increase rapidly.
The advantages of production capacity layout are highlighted, providing sufficient guarantees for performance growth. The company currently has 13 fan tower production bases (including under construction) in China, with a total production capacity of about 830,000 tons (including under construction), and has built a production capacity of about 630,000 tons, including 350,000 tons of Lufeng and 280,000 tons of Haifeng, which basically covers new energy bases and five major offshore wind power bases on seven continents, and is in a leading position in the industry. The company began construction of the Gansu Minqin plant with an estimated annual production capacity of 50,000 tons in January 2023, and plans to carry out technical improvements to factories in Yancheng, Jiangsu, Shanwei, Guangdong, etc. in 2023. Production capacity will be further increased at that time, providing guarantee support for the upcoming year of wind power.
Extend the industrial chain and actively lay out new energy power generation business. By the end of 2022, the company owned a total of about 481.8 MW of new energy power generation business and owned and operated about 363.8 MW of its own wind power plants. In 2022, the company's new energy power generation business achieved operating revenue of 540 million yuan, an increase of 9.7% over the previous year; the gross profit margin was 67.8%, a year-on-year decrease of 3.2 pp, mainly due to the increase in the company's power plants compared to the same period last year and the increase in costs. Among them, it owns 118 MW of grid-connected photovoltaic power plants, which achieved revenue of about 130 million yuan; it owned 363.8 MW of grid-connected wind farms, which achieved operating income of 4.1 billion yuan. The Tianneng Wuchuan 150MW wind power project, which the company is focusing on, progressed steadily during the reporting period. Grid-connected power generation was achieved in March 2023, and the scale is expected to increase further.
Profit forecasts and investment recommendations. The company's revenue for 2023-2025 is estimated to be 5.83 billion yuan, 7.45 billion yuan, and 9.27 billion yuan respectively. The net profit growth rate for the next three years is 120.8%/39.1%/33.1% respectively. Further expansion of the company's production capacity is expected to benefit from the recovery of the wind power industry and drive profit recovery upward. In the long run, performance is expected to be fully realized and the “buy” rating will be maintained.
Risk warning: The risk that demand for wind power orders will drop significantly and the company's capacity utilization rate will decline; the risk that steel prices will rise sharply, eroding the company's profits; and the risk that the epidemic has repeatedly caused production progress to fall short of expectations.