The improvement of incoming wind led to the growth of 3Q23 power generation, and Min Energy disclosed that 1-3Q23 power generation was-5% year-on-year, corresponding to 3Q23 power generation + 11% year-on-year. We have lowered the company's 23-25 profit forecast to $810 million (the previous value is $880 million), and the corresponding EPS is $0.44 ($0.43). The reduction of profit forecast is mainly as follows: 1) the forecast of offshore wind power utilization hours in 23 years is reduced; 2) the gross profit margin of wind power is reduced. The two high-quality assets of major shareholders (Pinghai Offshore Wind Power Phase III and Yongtai pumping) are expected to meet the prerequisites for asset injection and the new winning bid for offshore wind power projects to promote the company's medium-and long-term performance growth. Comparable company's 23-year Wind unanimously expects the average PE to be 14x, giving the company a 23-year 14xPE with a target price of 5.6yuan (the previous value of 6.02 yuan is based on 23-year 14xPE) and maintaining a "buy" rating.
3Q23 power generation is + 11% year-on-year, benefiting from the fact that the improvement of wind resources in Fujian is the core variable affecting the company's performance. The company disclosed that the overall power generation of 1-3Q23 is from-5% to 1.952 billion kWh year-on-year, of which Fujian wind power is-7% year-on-year and Heilongjiang wind power is-3% year-on-year; corresponding to the overall 3Q23 power generation year-on-year + 11%, of which Fujian wind power year-on-year + 13%, Heilongjiang wind power year-on-year-16%. Considering that no new projects were put into production during the year, we expect the installed scale to be the same as that in June at the end of 23. Due to the uncertainty of the incoming wind situation of 4Q23, we reduce the number of hours of offshore wind power utilization of the company for 23 years based on the principle of prudence.
The third phase of Pinghai Bay is waiting to start the injection process, and Yongtai pumping is expected to meet the injection conditions. Fujian Investment Group, a major shareholder, promised during the major asset restructuring of Zhongmin Energy in 2019, the prerequisites for the injection of assets related to the group include: 1) stable production; 2) profitability within a complete fiscal year; 3) there are no compliance issues. The Group's Pinghai Offshore Wind Power Phase III project was put into production at the end of the 21st and has met the above prerequisites. The Yongtai pumped storage project of the Group has four units with a total of 1.2GW, which was put into full capacity on March 28, and we expect to meet the injection conditions in 24 years.
Risk hints: the construction of new projects lags behind; the result of subsidy verification is lower than expected; and the acquisition of new projects is not as expected.