Revenue for the first three quarters of 2023 increased 17.0% year over year
The company announced operating data for the third quarter of 2023, which is in line with expectations overall. Revenue for the first three quarters rose 17.0% year on year to 16.64 billion yuan (RMB, same below), mainly due to increased natural gas consumption and LNG prices staying within a reasonable range of 4,000 yuan/ton to support demand for natural gas storage and transportation equipment, leading to a sharp increase of 33.9% year-on-year to 9.98 billion yuan in clean energy equipment revenue, of which 77.0% came from China, while the remaining 23.0% was overseas revenue. According to industry statistics, the country's apparent natural gas consumption and imports in the first three quarters of 2023 increased by 7.1% and 8.2% year-on-year respectively to 287.9 billion cubic meters and 87.77 million tons.
The hydrogen energy equipment business continues to grow rapidly, and sales of hydrogen energy storage and transportation equipment, vehicle hydrogen storage tanks, and hydrogen supply systems have all increased. The total revenue for the first three quarters rose 62.7% to 440 million yuan, and the share of total revenue increased 0.7 percentage points to 2.6% year on year. The company has achieved breakthroughs in research and development, such as successfully launching a 90MPa hydrogen-driven compressor, a 45MPa diaphragm compressor, the first 30MPa hydrogen tubular container in China, and the first low-temperature anhydrous ammonia truck in China.
In October 2023, the company successfully spun off its chemical and environmental protection equipment business (CIMC) (301559 SZ)) and listed on the Shenzhen Stock Exchange VEM. After listing, the company maintained a controlling interest and held 76.5% of the shares. However, the revenue of the chemical and environmental protection division in the first three quarters fell 7.9% year on year to 3.64 billion yuan, mainly due to a decline in demand for standard tanks.
The amount of new orders signed in the first three quarters increased 28.3% year on year
In the third quarter, the company's new orders rose 52.6% year on year to 7.09 billion yuan. Among them, clean energy equipment increased 87.6% year on year to 5.32 billion yuan. New orders for clean energy equipment in the first three quarters rose 61.5% year on year to 13.23 billion yuan, driving the total number of new orders in the first three quarters to 19.76 billion yuan. New orders for hydrogen energy equipment in the first three quarters and the third quarter increased by 34.1% and 16.2% year-on-year respectively to 580 million and 240 million yuan.
As of the end of September, the company's on-hand orders rose 27.6% year on year to $22.16 billion, reaching a record high. Among them, the clean energy and hydrogen energy sectors increased by 50.3% and 55.8% year on year to $15.51 billion and $4.2 billion respectively.
Reiterate the “buy” rating
After updating the above data, we technically raised the 2023 shareholders' net profit forecast by 0.3%, but decreased the 2024 forecast by 0.4%, and added the 2025 forecast. Accordingly, we adjusted the DCF estimate target price from HK$11.20 to HK$11.02, corresponding to 13.2 times the 2024 price-earnings ratio and 60.6% room for growth. Reiterate the “buy” rating.
Risk warning: (1) delays in production or project development; (2) large fluctuations in steel and energy prices; (3) exchange losses.