Key points of investment
Semi-annual report for 2023: Performance increased by 44% year on year: profit in the elevator parts business rebounded, energy storage/new energy power plants improved 1) First half of 2023: achieved revenue of 1.03 billion yuan, up 3% year on year; net profit for the first half of 2023 was 0.7 billion yuan, up 44% year on year.
In 2023, Q2 achieved revenue of 620 million yuan, an increase of 14% over the previous year; net profit from the previous year was 60 million yuan, an increase of 100% over the previous year.
2) Profitability: In the first half of 2023, the company's gross profit margin was 16%, up 2.1 pct year on year; net profit margin was 7%, up 1.5 pct year on year. In Q2 2023, gross profit margin was 17%, up 2.0 pct year on year; net interest rate was 9.4%, up 4.4 pct year on year.
The newly won bid for the new energy independent (shared) energy storage power plant project in Guizhou Province. The energy storage/new energy power plant is in full order. According to the official WeChat platform of the subsidiary Tianqi Hongyuan, recently, the 300MW/600MWh new independent (shared) energy storage power station project developed by Tianqi Hongyuan successfully obtained a registration certificate for an enterprise investment project in Guizhou Province, and was connected to the 500 kV Shixiang substation in **** Community. It covers an area of 50,000 square meters, with a total investment of over 2 billion yuan. The construction period is about two years. After the project is completed and put into operation, it is estimated that the annual output value will be nearly 300 million yuan, and the annual tax payment amount will exceed 20 million yuan. The project will use BMS, PCS, and EMS independently developed by Tianqi.
Energy storage and new energy power plant business: leading technology, abundant resources, sufficient potential projects 1) In 2022, the company acquired 51% of the shares in Beijing Tianqi Hongyuan New Energy Technology Co., Ltd. and completed industrial and commercial changes, entering the stage where the two main businesses of elevator components and energy storage/new energy went hand in hand. In 2022, the business had revenue of 210 million yuan, accounting for 8%, and gross profit margin of 29.0%.
2) Energy storage system integration: Tianqi Hongyuan independently masters PCS/EMS/BMS core technology, has a unique “Tianqi AI storage module” solution, and forms an intelligent string solution with “3S technology+AI intelligent module+balance technology”. In 2022, the company completed the integration of the 89.5 MWH grid-side large-scale storage system in Ningxia, the delivery of the World Bank's Kenya optical storage microgrid system, completed the bid for the World Bank's 20MW optical storage project loan from the National Electricity Authority of Ethiopia, and the domestic grid-side storage system and the African microgrid energy storage system blossomed in many places.
3) New energy power plant development: The Tianqi Hongyuan team originated from the well-known enterprise CGN Solar Energy Co., Ltd., and has participated in the construction of many well-known projects in the industry. There are plenty of honors and awards, and plenty of projects in hand. In 2022, the company completed the relocation of the 300MW wind hydrogen storage integrated project in Yudaokou, Aerospace Hongyuan Weichang, greatly improved the project's wind field conditions and effective power generation time, and steadily promoted the Chengde Aerospace Tianqi 500MW solar hydrogen storage integrated multi-energy complementary demonstration project site selection, land review, filing, approval, power grid access, etc., and completed additional development and completed the 100MW wind power generation project index acquisition in Jinghai Zhongwang Town, Mingyuan, Jiawang, Tianjin. Relying on the multi-energy complementary power plant innovation and shared energy storage development model, the company completed the development of the 1GWh shared energy storage in Weichang Station project administrative examination and approval filing.
Elevator parts and materials business: Tying with the world's leading customers, steady demand provides a margin of safety. 2022 revenue was 2.18 billion yuan, accounting for 89%, a year-on-year decline of 4.5%, and a gross profit margin of 14.9%. The company responded positively to increased market competition, the discontinuation of production by major customers in the second quarter and the risk of fluctuations in the price of bulk raw materials, actively adjusted the pace of preparation, continuously optimized the product structure, and continued to expand its market share. The company is a parts supplier to well-known elevator manufacturers at home and abroad, such as Schindler, Otis, Tisheng, KONE, Hitachi, and Theo, and is in a leading position in the industry in the field of elevator ancillary products. The company is actively expanding product categories, integrating upstream metal materials, and focusing on R&D and innovation. The elevator parts business is expected to continue to grow steadily.
Profit forecasting and valuation
Net profit for 2023-2025 is estimated to be 2.0/43/5.3 billion yuan, a year-on-year increase of 36%/118%/24%. The corresponding EPS is 1.1/2.4/3.0 yuan, and the corresponding PE is 21/10/8 times, maintaining the “buy” rating.
Risk warning: Risk of fluctuations in raw material prices, risk of energy storage/new energy power plant business progress falling short of expectations