Event: in the first half of 2023, the company achieved operating income of 1.34 billion yuan, an increase of 10% over the same period last year, a net profit of 120 million yuan, an increase of 4.1% over the same period last year, and a net profit of 120 million yuan, an increase of 6.2% over the same period last year.

In the second quarter of 2023, the company achieved revenue of 830 million yuan, an increase of 6.1% over the same period last year, and a net profit of 70 million yuan, down 24.7% from the same period last year.

Gross profit margin repair upward, expense rate for a short time under pressure. In the first half of 2023, the company's sales gross profit margin was 28.6%, an increase of 1.8 ppm over the same period last year; the net sales profit margin was 9.3%, down 0.6pp from the same period last year. In terms of expenses, the company's sales expense rate / management expense rate (including R & D expenses) / financial expense rate is 0.7%, 7.8%, 7.5%, respectively, compared with the same period last year + 0.3pp/-0.05pp/+0.3pp.

The tower tube has been repaired for profit, and the construction of sea breeze has been accelerated. In the first half of 2023, the company's revenue from fan towers reached 1.01 billion yuan, an increase of 10% over the same period last year, and a gross profit margin of 15%, an increase of 2.8pp over the same period last year. From the point of view of shipping, the company sold 132000 tons of wind towers in the first half of the year, of which sea breeze towers and single piles sold about 28000 tons, accounting for 21%. With the recovery of wind power installation growth and the stabilization of industrial chain prices, the company's tower tube business is expected to achieve both volume and profit. From the point of view of production capacity, the total production capacity of the company's 14 bases (including under construction) is 881000 tons. In the future, with the technical transformation of Yancheng, Shanwei and other factories, the production capacity will be further increased. At present, the company has four marine equipment bases, pipe racks, sea breeze floating foundation and other new products continue to promote, and the company relies on the major shareholder Zhuhai Port Group, with rich wharf and shipping resources, the company's sea breeze business is expected to meet the volume.

New energy power generation maintains high gross margins, and the industrial chain continues to expand in coordination. In the first half of 2023, the company's new energy power generation business achieved revenue of 310 million yuan, an increase of 10.2% over the same period last year, and a gross profit margin of 70.6%, an increase of 0.5pp over the same period last year.

By the end of the reporting period, the company operates its own wind power station about 513.8MW, photovoltaic power station 118MW, and actively promote the application and approval of new projects. Through the synergy effect of industrial chain, the company combines the manufacture of fan tower with the development and utilization of wind and light resources and the procurement of fan mainframe to promote the overall long-term development.

The overseas wind power market has a broad space, and the company speeds up its layout. The company has set up an overseas division, and according to the investor exchange announcement, the company is passing the factory inspection of Siemens Gomeisa, Ainakon and other international mainstream mainframe plants, and is expected to pass the verification in the second half of 2023, thus entering its supplier list. With the gradual landing of the company's production capacity, overseas business is expected to achieve rapid development.

Profit forecast and investment advice. The company's revenue from 2023 to 2025 is expected to be 5.34 billion yuan, 6.81 billion yuan and 8.47 billion yuan, respectively, and the growth rate of net profit for the next three years will be 103.5%, 47.5% and 27.8%, respectively. The further expansion of the company's production capacity is expected to benefit from the recovery of the wind power industry, driving profits to return upward, and the performance is expected to be fully realized in the long run, maintaining the "buy" rating.

Risk hints: the risk of a significant decline in wind power order demand and a decline in the company's capacity utilization; the risk of a sharp rise in steel prices eroding the company's profits; and the risk that the epidemic repeatedly leads to a lower-than-expected production schedule.