Key points of investment
The company is a leader in the manufacture of fan towers, and relies on the growth of two-wheel drive manufacturing and operation by the Zhuhai Port Group.
The company is a leading supplier of fan towers in China, gradually optimizing the layout of the wind power industry. The company achieved revenue of 4.183 billion yuan in 2022, an increase of 0.93% over the previous year, and the CAGR for the third year of 2019-2022 was 19.29%; Guimu's net profit was 229 million yuan, down 49.69% from the previous year; the CAGR for the three years of 2019-2022 was -5.29%, mainly due to the impact of the “rush to install”, increased competition in the tower tube industry, the decline in wind field wind speed, and the national bidding Internet policy; the company achieved net profit of 508 million yuan in the first quarter of 2023, an increase of 16.83% over the previous year; achieved net profit of Gumo 54 million yuan, an increase of 104.36% over the previous year, mainly due to a sharp increase in tower sales during the reporting period, up 18.76% over the same period last year.
Deeply cultivate wind turbine tower manufacturing and accelerate the expansion of offshore production bases.
The increase in demand for tower piles has been driven by large-scale fans and large-scale offshore wind power. It is estimated that the global and domestic wind power tower pile foundation markets will reach 144.3 billion yuan and 79.7 billion yuan respectively in 2026, while the global and domestic wind turbine tower pile foundation markets will have four-year CAGR of 11.20% and 24.24% respectively in 2022-2026. The company's main business is wind turbine tower equipment manufacturing, actively improving the layout of the Sea Wind base and expanding production capacity. In 2020-2022, the company produced 402,200 tons, 3900 tons and 442,200 tons of wind tower-related products respectively; the company followed the development trend of offshore wind power and actively expanded its offshore business. By the end of '22, the company had deployed 13 production bases nationwide, with a total production capacity of 830,500 tons, including 4 offshore bases (including a factory under construction in Dongying), with a cumulative production capacity of 480,000 tons.
The new energy power generation project is running well, and wind farm construction has been actively invested.
The company actively promotes strategic transformation and industrial chain expansion to develop new energy power generation business. The revenue share of the company's new energy power generation business in 2020-2022 was 7.60%, 11.96%, and 12.79% respectively. The revenue ratio of the new energy power generation business segment showed an upward trend. The 23Q1 Wuchuan Wind Farm was successfully connected to the grid, and the new energy generation capacity increased 17.81% over the same period last year; as of the end of 23Q1. The company has achieved a cumulative grid-connected capacity of 631.80 MW of new energy power plants, including about 118.00 MW of photovoltaic power plants and 513.80 MW of wind farms.
Profit forecasting and valuation
First coverage, giving a “buy” rating. The company is the leader in domestic tower piles and actively promotes the new energy panel power generation business.
We expect the company's net profit to the mother in 23-25 to be 518 million yuan, 700 million yuan and 904 million yuan respectively; the CAGR of 22-25 is 58%; the corresponding EPS is 0.64 yuan, 0.87 yuan, and 1.12 yuan respectively; and the corresponding PE is 13, 10, and 8 times respectively. We selected Haili Wind Power, Taisheng Wind Energy, and Tianshun Wind Energy as industry comparable companies. The average PE in the 2023 industry was 21X. Taking into account the company's performance growth and safety margin, we valued the company's PE in 2023 21 times, corresponding to the current market value with room for a 56% increase in market value; first coverage gave a “buy” rating.
Risk warning: wind power installation falls short of expectations, raw material prices fluctuate, project construction falls short of expectations, etc.