The net profit of 23H1 was 538 million yuan, an increase of 7.2% over the same period last year, in line with expectations. Although the price of coal sales fell, the company's gross profit margin increased slightly to ensure profit growth; cogeneration benefited from the recovery of downstream demand and the commissioning of new projects, power generation / steam supply increased by 14.1% and 5.3% compared with the same period last year, and the commissioning of the Shanying project is expected to further contribute to the performance increase in 23H2. The company expands energy storage, distributed photovoltaic and green logistics business around the existing dual-main business, and is optimistic that the company will make full use of traditional business resources to accelerate new business development and improve performance and cash flow growth. We maintain the company's 2023 to 2025 EPS forecast of 2.14 yuan 2.48 / 2.65 yuan, the target price of 18.0 yuan, maintain the "buy" rating.
The net profit of 23H1 is 538 million yuan, and the performance is in line with expectations. In the first half of 2023, the company achieved operating income of 21.93 billion yuan, down 21.6% from the same period last year; net profit from its parent was 538 million yuan, up 7.2% from the same period last year; corresponding to EPS0.96 yuan, it increased by 6.7% over the same period last year, and the performance was in line with expectations. From a quarterly point of view, 2023Q2's operating income was 10 billion yuan, down 35.5% from the same period last year; its net profit was 230 million yuan, down 11.7% from the same period last year; and corresponding to EPS0.41 yuan, it was down 12.8% from the same period last year.
The decline in volume and price led to a decrease in revenue, and the continued expansion of gross profit margin contributed to performance growth. In terms of sales volume, 23H1 coal sales decreased by 9.96% to 24.837 million tons compared with the same period last year, and we judged that the increase in the proportion of Changxie coal squeezed coal trade and other factors; in terms of prices, market coal prices continued to decline since May this year, 23Q2 Qinhuangdao 5500 kcal thermal coal prices dropped 22.6% / 15.3% compared with the same period last year, and the company's coal sales prices decreased accordingly. Although the reduction in the volume and price of coal sales led to a decrease in revenue, the company strengthened its profitability through sound operation and quality improvement. 23H1 gross profit margin rose 1.37 percentage points to 5.84% compared with the same period last year, supporting the continued growth trend.
Demand resumes and new projects are put into production, and the performance of cogeneration business is outstanding. 23H1's electricity sales increased 14.1% year-on-year to 590 million kWh, and steam sales increased 5.3% to 3.816 million tons, mainly due to the industrial recovery in Jinhua, Jiaxing, Tongxiang and other areas where the project is located, as well as the newly launched projects such as Jinyi biomass cogeneration and Tongxiang Tai Aisi gas and heat cogeneration. At present, the Haiyan Shanying thermal power project has been put into trial production, and we expect that 23H2 will begin to release performance increments and promote the further growth of cogeneration business profits.
It is proposed to extend the layout of the new energy industry chain and open the second growth curve. The company's 14th five-year Plan clearly will be based on the existing coal trade, cogeneration business to expand to the new energy industry chain, around the new energy storage, distributed energy and energy storage, green intelligent logistics three main lines to carry out equipment manufacturing and project operation business. Considering that the company's coal trade business lays a good foundation for the development of green logistics, and customers in the downstream industrial park of cogeneration are expected to become potential resources for the development of distributed photovoltaic and energy storage, we believe that the related business of the company's new energy industry chain is expected to develop rapidly with the growth of customers' demand for green energy, opening up the growth space.
Risk factors: large fluctuations in coal prices; higher-than-expected changes in the support policy of the cogeneration industry; the company's new project progress is lower than expected; the company's new business development progress is not as expected.
Earnings forecast, valuation and rating: taking into account the company's 2023H1 performance in line with expectations, we maintain the company's 2023-2025 home net profit forecast of 1.479 billion yuan respectively, corresponding to the 2023-2025 EPS forecast of 2.14 pounds 2.48 pounds 2.65 yuan, the current stock price corresponding to 2023-2025 PE is respectively 7-6-6 times. We refer to the average valuation level of the latest net assets of comparable coal circulation and cogeneration companies (Fuchun Environmental Protection, Shimao Energy, Mountain Coal International) corresponding to 1.9 times PB, and give the company 1.9 times the target PB in 2023, corresponding to the target price of 18.0 yuan, maintaining the "buy" rating.