Event: on October 27, the company disclosed that 2019Q1-Q3 realized operating income of 1.49 billion yuan, an increase of 91.5% over the same period last year, and a net profit of 146 million yuan, an increase of 143% over the same period last year. 2019Q3 realized operating income of 630 million yuan, an increase of 58% over the same period last year, and a net profit of 62 million yuan, an increase of 110% over the same period last year and 10.7% month-on-month growth. The company's performance is within the forecast range.
Shipments of wind towers continued to grow at a high rate in the third quarter, with orders-on-hand hitting a record high: three quarterly reports revealed that 2019Q1-Q3 wind tower sales were about 176200 tons (about 77000 tons of Q3), an increase of about 85 percent over the same period last year. We estimate that the company's 2019Q3 wind tower sales revenue of about 590 million yuan, wind tower ton gross profit is basically the same as the first half of the year, a significant increase over the same period last year. The company currently has orders of about 3.525 billion yuan (including tax), an increase of 28% over the previous month, which is enough to support the continued growth of the company's future performance.
New energy power generation business is growing as scheduled: we expect 2019Q1-Q3 's power generation business (wind power + photovoltaic) to contribute about 120 million yuan in revenue, about double the growth rate compared with the same period last year. After the company completed the acquisition of Jingbian wind farm about 49MW, the cumulative holding of the power station is about 223.8MW. In addition, the company has accumulated wind farm approval from 190MW, in which two phases of the Texas project are under construction for a total of 100MW, and 90MW is still going through the preliminary formalities. It is expected that the 50MW wind farm in Texas will be connected to the grid at the end of the year and continue to contribute cash flow.
Investment advice: the company's wind tower business has sufficient orders on hand, the fourth quarter is the peak of order confirmation, and the single-quarter profit is expected to reach a new high. Considering that the decline in steel prices is smaller than we expected, the gross profit of tons in the fourth quarter of this year has been reduced to 1898 yuan / ton, and the shipments in the fourth quarter have been raised to 116000 tons. The operating income from 2019 to 2021 was increased to 2.41 billion yuan, 2.47 billion yuan and 2.1 billion yuan respectively, and the company's net profit from 2019 to 2021 was 250 million yuan, 370 million yuan and 400 million yuan, respectively. The corresponding earnings per share are 1.11 yuan, 1.64 yuan and 1.77 yuan respectively, maintaining the "buy-A" investment rating.
Risk hint: the confirmation of on-hand orders is not as expected; steel prices have risen sharply.