Summary of the report

Event: according to the company's semi-annual report for 2023, 23H1 achieved revenue of 5.627 billion yuan, an increase of 11.87% over the same period last year, and a net profit of 801 million yuan, an increase of 106.88% over the same period last year. Q2 achieved revenue of 2.772 billion yuan in a single quarter, an increase of 14.34% over the same period last year, and net profit of 476 million yuan, an increase of 119.28%.

Significant improvement in profitability, outstanding performance in the first half of the year

The company's revenue grew steadily and its profitability improved significantly in the first half of the year. 23H1 gross margin was 17.8%, year-on-year + 0.13pcts, net profit 14.27%, year-on-year + 6.55pcts% Q2 single-quarter gross profit margin 18.85%, same / month ratio + 2.11pcts/+2.07pcts, net profit rate 17.09%, same / month ratio + 8.63pcts/+5.57pcts, respectively. The company's performance in the first half of the year was eye-catching, mainly due to: (3) a substantial increase in wind power revenue and profits compared with the same period last year; the decrease in energy consumption of ② generators and the increase in feed-in electricity prices, resulting in an increase in the profitability of cogeneration units; ③ achieved remarkable results in adjusting its financing structure and channels and reducing financing costs; and ④ achieved significant results in the disposal of relevant claims and equity during the reporting period.

The cogeneration market is basically stable, and the profitable capacity is fully released under the background of economic recovery.

As of June 30, 2023, the total installed capacity of the company is 2903.04MW, including gas turbine cogeneration 1777.14MW, wind power 743.90MW, garbage power generation 116MW, coal-fired cogeneration 266MW. During the reporting period, the company completed settlement of 6.7768 million tons of steam, down 4.66% from the same period last year; completed settlement electricity of 4.897 billion kWh, an increase of 0.12% over the same period last year; and completed garbage disposal of 1.1065 million tons, an increase of 8.65% over the same period last year. In the case of high fuel costs and economic recovery, the company fully releases profitable capacity and maximizes benefits through technological transformation, optimization of the mode of operation and other measures.

The customers and scenes of power exchange business have been continuously developed, and the integrated layout of optical storage, charging and selling has been gradually improved.

The company has upgraded its original mobile recharging business to enable a new "fixed + mobile" power system service provider business with "optical storage, charging and selling". An energy ecological integrated digital platform covering charging and replacement operation, battery banking, energy trading, industry and financial integration, digital marketing and asset management has been initially built. In terms of recharging, the company's coverage of customers and application scenarios has been further expanded. By the end of June 23, the company had 81 integrated energy stations for passenger vehicles and 49 integrated energy stations for commercial vehicles under construction; operating mileage and recharging capacity increased in the first half of the year, and many projects have achieved positive cash flow under scale effect. In the field of mobile energy storage, realize multi-station cooperation, multi-energy complementary, intelligent peak elimination matching, filling and replacement intelligent matching. The company announced that the annual 20GWh energy storage system project of its holding subsidiary was put into production, the main products are energy storage series products and power battery series PACK/ battery cluster products, which are suitable for diversified scenarios such as power side, grid side and large base, industrial and commercial distribution, laying the foundation for the transformation and upgrading of the trinity strategy of "power + energy storage + computing power".

Xiexin Intelligent Computing platform has been officially opened, and the layout of the global computing center has been steadily advanced.

The company has made steady progress in the field of AI computing power. In May, it signed a strategic cooperation framework agreement with the people's Government of Xiangcheng District, Suzhou City, to jointly launch the first energy computing center in China to enhance the core competitiveness of "electricity plus computing power". On August 27th, Xiexin Zhi Computing officially opened the computing power rental platform, with a computing capacity of up to 100 trillion times per second. For customers, comprehensive cooperation with Huawei Digital Energy, strategic cooperation framework agreement with Kyushu Cloud and investment framework agreement with Gavin Technology are expected to bring exemplary effects, and the company is expected to continue to open up more customers in the future. Xiexin Intelligence will continue to accelerate its development in the future, and plans to set up 15 energy intelligence centers around the world by 2024, with a fixed investment of more than 10 billion yuan, to build an internationally competitive digital industry cluster.

Investment suggestion

It is estimated that the company's 2023-2025 net profit will be 1.419 billion yuan, 1.825 billion yuan and 2.238 billion yuan respectively, corresponding to the current PE of 13.8X/10.8X/8.8X, maintaining the "buy" rating.

Risk hint

Macroeconomic downturn; fluctuation of raw material prices; risk of policy change in electric vehicles; customer expansion is not as expected; computing business is not as expected, etc.