2023Q3 performance: The company released a report for the third quarter of 2023. Net profit to the mother of the first three quarters was a cumulative operating income of 7.490 billion yuan, a year-on-year increase of 18.04%; net profit after deduction of 1.21%; net profit after deducting non-return to mother was 752 million yuan, a year-on-year decrease of 22.84%; of these, Q3 achieved operating income of 3,58.03% year-on-year, up 52.07% month-on-month; net profit to mother was 214 million yuan, a decrease of 36.07% year-on-year; after deducting non-return to mother Net profit was 68 million yuan, a year-on-year decrease of 71.20% and a year-on-month decrease of 75.44%.
The gross margin of hosts declined in a single quarter, and the market-side price reduction trend was reflected in the reporting side. The company's revenue in the single quarter increased significantly year-on-year, reflecting a significant increase in the scale of console product delivery; however, the continued price reduction trend in the market posed a major challenge to the profitability of the company's products. Low-price orders put pressure on the company's gross margin of console sales in a single quarter, down 9.63 pct year on year and 5.82 pct from month to month. We judge that there is limited room for the price of a single kilowatt console to continue to decline. As new products mature and scale increase, and the company's overseas markets continue to expand, the overall profit level of console products is expected to stabilize and improve.
CWP2023 was held grandly, and the company released a variety of console products. The 2023 Beijing International Wind Energy Conference & Exhibition (CWP2023) was grandly held in Beijing. During this period, the company unveiled the world's largest onshore wind turbines (15MW) and 13/16MW offshore wind turbines, continuing to update and iterate to launch new products as a leader in the industry's megawatt units. The launch of the new product reflects the company's focus on R&D investment, customer needs, and competitive leadership, which is expected to enhance the company's ability to continuously obtain future orders.
Overseas expansion continues to advance, and orders from Kazakhstan have been obtained. Internationalization is the only way for Chinese OEMs, and it is also an important direction for the company's strategy. During the 3rd “Belt and Road” International Cooperation Summit Forum, Sany Heavy Energy, CLP International and the Samruk-Kazena Fund jointly signed a tripartite cooperation agreement for the 1GW wind power+energy storage project in Kazakhstan to further determine the project cooperation model and lay the foundation for the subsequent development of the project. The project is a major breakthrough in the company's overseas market development. We expect the company to continue to advance overseas markets in the future, and it is expected that the company's market influence and performance level will continue to increase.
Investment suggestions: The company's continuous high-intensity R&D investment brings core technical advantages, long-term industrial chain layout brings advantages in integrated collaboration and production cost, and adhering to digital transformation brings advantages in reliability and management efficiency.
We expect the company's revenue in 2023-2025 to be 158.81/193.24/23.59 billion yuan, up 28.9%/21.7%/22.1% year on year; net profit to mother is 18.34/23.74/2,726 billion yuan, year-on-year growth rate is 11.3%/29.5%/14.8%, EPS is 1.52/1.97/2.26 yuan respectively, corresponding PE is 20/15/13 times, maintaining a “gain” rating.
Risk warning: Wind power installations fall short of expectations, industry demand weakens; raw material prices fluctuate greatly; industry policy changes; industry competition intensifies.