Incident: The company released the 2023 semi-annual report. 2023H1 achieved operating income of 53,078 billion yuan, up 5.54% year on year, and realized net profit of 590 million yuan, reversing losses year on year; of these, 2023Q2 achieved net profit of 224 million yuan, reversing losses year on year, reversing losses year on year and 38.96% month on year.
The energy and industrial equipment sector has been growing steadily, and the industrial structure of the integrated service sector has been continuously optimized. 2023H1 focuses on its main business and optimizes the industrial structure. Among its various businesses, the energy equipment sector benefited from the boom in coal-fired power generation business and power grid business. Revenue increased 5.8% year on year to 25.677 billion yuan, and gross margin increased by 2.2 pct to 19.4% year on year. The industrial equipment sector benefited from the steady development of the elevator and industrial infrastructure business. Revenue increased 17.0% year on year to 19.609 billion yuan, and gross margin increased slightly to 16.8% year on year. The integrated services sector is in the process of continuously optimizing industrial institutions. Revenue fell 11.7% year on year to 10.265 billion yuan, and gross margin fell 1.2 pct to 12.6% year on year.
New orders for energy equipment have maintained a high increase, and the number of orders in hand is sufficient to guarantee the growth in performance. 2023H1 achieved new orders of 820.01 billion yuan, up 38.4% year on year. Among them, the energy equipment sector performed well. New orders increased 89.4% year on year to 49.46 billion yuan (nuclear power equipment increased 182.3% year on year to 78.2 billion yuan, coal power equipment increased 386.7% year on year to 22.68 billion yuan), new orders for industrial equipment fell 4.8% year on year to 21.43 billion yuan, and new orders for integrated services increased 4.6% year on year to 11.12 billion yuan.
Breakthroughs have been achieved in the fields of hydrogen energy and photovoltaics, and are expected to contribute new growth in performance in the future. The company continues to enhance the advantages of the energy equipment industry, focuses on new energy equipment and actively expands multi-energy complementary businesses such as “wind power and hydrogen storage”. While it has deep accumulation in the fields of wind power and energy storage, it is also developing business in the hydrogen energy and photovoltaics fields:
Companies in the hydrogen energy sector focus on key core equipment in the four major areas of “production, storage, addition, and use”, and use hydrogen production from electrolyzed water as an industrial breakthrough point. Currently, they have released 2000Nm3/h alkaline electrolyzer products.
The photovoltaic sector focuses on core manufacturing processes such as advanced photovoltaic cell and module production, and cooperates with industry-leading equipment supplier Ideal Wanlihui to jointly research and launch 600MW heterojunction photovoltaic complete line equipment. At the same time, Shanghai Hengxi Photovoltaic Technology Co., Ltd. was established and an industrial investment agreement was signed with the People's Government of Haimen District of Nantong City. It is planned to invest 4.8 GW of heterojunction battery and module production capacity. It is expected that 1.2 GW in the first phase will be offline by the end of 2023.
Maintaining the “buy” rating: We maintain the original profit forecast. We expect the company's net profit for 23-25 to be 25.36/32.22/4,037 billion yuan, corresponding to EPS of 0.16/0.21/0.26 yuan. Currently, the A-share price corresponds to 27 times the 23-year PE, and the H-share price corresponds to 10-year PE. As a leading domestic energy equipment (coal power, offshore wind power, nuclear power) manufacturer, in the context of China's energy structure transformation and industrial restructuring, the company is expected to use its leading advantage to further increase its market share. At the same time, with the support of the company's technological research and development advantages, the energy storage and hydrogen energy business is also expected to become the company's new performance growth point, maintaining the “buy” rating for A/H shares.
Risk warning: Cost pressure due to rising raw material prices; overseas business risks due to geopolitical and other factors; risk of exchange rate fluctuations, etc.