Events:
Haili Wind Power released the third quarterly report of 2023. In the first three quarters of 2023, the company realized operating income of CNY 1.555 billion, with a year-on-year increase of 32.85%, net profit of CNY 65 million, with a year-on-year decrease of 72.97%, and net profit of CNY 47 million deducted from non-parent, with a year-on-year decrease of 45.87%. In Q3 of 2023, the Company realized operating income of RMB 516 million yuan, with a year-on-year decrease of 0.69%, net profit attributable to parent company of RMB-70 million yuan, with a year-on-year decrease of 238.97%, and net profit deducted from non-parent company of RMB-70 million yuan, with a year-on-year decrease of 253.26%.
Profitability level fell on the same month
In the first three quarters of 2023, the gross profit margin of the Company reached 12.42%, year-on-year-1.7pct, and the net interest rate reached 4.36%, year-on-year-16.6pct. We believe that the decline in profit level is mainly due to 1) the settlement cycle of Haifeng Project before the "rush to install tide" is relatively long, and the bad debt reserve of 23Q3 Company is RMB 74 million yuan;2) the demand for Haifeng construction is less than expected, and the capacity utilization rate of the new factory of the Company is relatively low;3) the wind speed condition of the participating wind field is poor, and the investment income decreases.
Capacity continues to expand steadily
In addition, the Company plans to add six new production bases in Jiangsu, Shandong and other major sea breeze provinces, with large volumes and weights of tower and installed equipment. The Company has excellent production capacity layout, which is expected to reduce transportation costs and enhance product competitiveness while effectively ensuring contract performance.
Domestic sea breeze construction accelerates, and shipments are expected to increase in 24 years
Recently, there have been frequent positive events in domestic offshore wind power: 1) Sheyang 1GW sea breeze project has been approved for commencement; 2) Guangdong sea breeze project has changed positively; 3) construction of several domestic sea breeze projects has been promoted; with the gradual removal of restrictive factors, sea breeze construction is expected to accelerate. We expect that the newly installed capacity of domestic sea breeze is expected to reach 6/10GW in 2023-24, achieving a high increase compared with the same period last year; As a leading enterprise in sea breeze tower and pipe pile, the total production capacity of the company in 24 years is expected to exceed 1.1 million tons, and the shipment is expected to exceed 900,000 tons, achieving a high year-on-year increase, which is expected to benefit from the sea breeze demand.
Earnings forecast, valuation and rating
We expect the company's revenue for 2023-25 to be 21.3/81.9/111.6 billion yuan respectively (Original value: 49.73/89.99/126.17 billion yuan), growth rate: 30.5%/284.2%/36.3% respectively, net profit attributable to parent: 1.3/7.8/12.9 billion yuan respectively (The original value is 7.7/12.9/18.4 billion yuan), the growth rate is-37.9%/510.1%/65.9% respectively, and the EPS is 0.6/3.6/5.9 yuan/share respectively. The company is a sea breeze tower and a basic leading enterprise. The performance inflection point has reached. We give the company 23 times PE for 24 years, corresponding to the target price of 82.27 yuan. Maintain a "Buy" rating.
Risk tips: offshore wind power installation is not as expected, raw material prices fluctuate, and the progress of production expansion is not as expected.