In the third quarter of 2023, the Company realized revenue of CNY 2.966 billion in a single quarter, year-on-year +3.47% and month-on-month +7.02%; net profit attributable to parent was CNY 125 million, year-on-year--54.10% and month-on-month-73.73%; net profit deducted from non-parent was CNY 66 million, year-on-year +199.98% and month-on-month-44.72%. Benefiting from the cost reduction of coal and natural gas, the cogeneration of the Company resumed normal production, superimposed new business contribution, and the overall revenue performance was stable. The slight slowdown in the growth rate in the third quarter was mainly related to the sale of some assets. The Company's digital energy business gradually landed and maintained its "Buy" rating.
Asset sales increased profitability and traditional business performance improved. In the first three quarters of 2023, the Company realized revenue of CNY 8.593 billion, with a year-on-year increase of 8.82%; net profit attributable to parent was CNY 926 million, with a year-on-year decrease of-40.42%; net profit deducted from non-parent was CNY 289 million, with a year-on-year increase of +108.38%. Among them, the revenue in the third quarter was 2.966 billion yuan, year-on-year +3.47%, month-on-month +7.02%; the net profit of parent company was 125 million yuan, year-on-year--54.10% and month-on-month-73.73%; the net profit deducted from non-parent company was 66 million yuan, year-on-year +199.98%, month-on-month--44.72%. Benefiting from the cost reduction of coal and natural gas, the cogeneration of the Company resumed normal production, superimposed new business contribution, and the overall revenue performance was stable. The slight slowdown in the growth rate in the third quarter was mainly related to the sale of some assets.
The storage, charging and replacement scheme is implemented, and the intelligent calculation center provides increment. According to the announcement of the Company, in terms of clean energy business, as of the first three quarters, the total installed capacity of the Company's grid-connected operation was 2922MW, including 1777MW of gas turbine cogeneration, 744MW of wind power, 116MW of waste power generation and 257MW of coal-fired cogeneration, with little change since the third quarter. In the first three quarters alone, the company settled 9.575 million tons of steam,-9.87% year-on-year; settled electricity 7.086 billion kWh,-4.49% year-on-year; completed garbage disposal volume 1.6749 million tons,+7.88% year-on-year. In terms of digital energy business, the "fixed + mobile" new power system service provider business was enabled by the integration of "light storage and charging for sale". According to the announcement of the company, at present, the company has built 17 platform ecological intelligent operation service standardization systems, realized 12 docking station types, 9 charging piles and 20 vehicle models, and has completed the development of storage-charging-replacement integrated power station. The company expects to put into operation 50 liquid-cooled charging stations in the next 3 years. In terms of computing power, the first intelligent computing center has been completed and put into operation. At present, many centers such as Shanghai have upgraded their schedules.
Profits in the main business picked up and investment in new products increased. In the first three quarters of 2023, the overall gross profit margin of the Company was 17.51%, with a year-on-year +0.08pct, among which the gross profit margin of the third quarter was 16.98%, with a year-on-year-0.03pct and a month-on-month-1.87pcts. In terms of expenses, the sales/management/R & D/financial expense ratios in the first three quarters were 1.1%/6.1%/0.2%/5.3% respectively, compared with +0.3/+1.4/+0/-2.9pcts. Among them, the financial expense ratio decreased more, mainly due to the adjustment of financing structure and channels; the increase in sales expenses was mainly due to the increase in digital energy investment.
In the first three quarters, the net interest rate of the company was 10.8%,+2.4pcts year-on-year; the net interest rate deducted was 3.4%,+1.6pcts year-on-year. The non-recurring income was mainly the profit and loss of asset divestiture.
Risk factors: digital energy nationwide promotion failed to meet expectations; cogeneration construction failed to meet expectations; natural gas costs rose sharply; industry policies exceeded expectations, etc.
Earnings forecast, valuation and rating: Considering the divestiture of some assets of the company, we slightly adjust the EPS forecast of the company from 2023 to 2025 to 0.73/0.85/0.98 yuan (original forecast is 0.77/0.90/1.05 yuan), and the current stock price corresponds to 16/14/12 times PE from 2023 to 2025 respectively. The company started with cogeneration, and together with its parent company, it is the leader of domestic private enterprise energy enterprises. The traditional main business operation is stable, the resource endowment of electricity exchange business is strong, and the business strategy is focused clearly. It is expected to enjoy the promotion of domestic electricity exchange industry with priority. With reference to the PE valuation of comparable companies such as Trede and Hanchuan Intelligence in 2023 (Wind consistent expectation), considering that the company's digital energy growth is relatively high but the original main business is mature, 23 times PE will be given in 2023, corresponding to the target price of 17 yuan, and the "buy" rating will be maintained.