Introduction to this report:

The company's performance rose year over year due to an increase in park development repayments in the third quarter, and gross margin fluctuated greatly due to the impact of the project structure. The third quarter project was adjusted with the aim of further laying out industrial investment and green power business.

Key points of investment:

The performance was in line with expectations, and the “increase in holdings” rating was maintained. The company achieved revenue of 2.61 billion yuan in the first three quarters of 2023, a year-on-year decrease of 15%, and net profit of 1.03 billion yuan, a year-on-year decrease of 0.2%. Among them, the third quarter achieved revenue of 70 billion yuan, an increase of 7% over the previous year, and net profit of 260 million yuan, a year-on-year increase of 36%. Maintain the company's 2023-2025 EPS at 1.28 yuan, 1.57 yuan, and 1.86 yuan, maintain the target price of 13.68 yuan, and maintain the “increase in holdings” rating.

The different stages of park development projects have led to a decline in short-term gross margin, but overall it is still at a high level. The company's gross margin for the first three quarters of 2023 was 49%, down 8.6pct from the full year of 2022. It is speculated that mainly because the company's park business projects are at different stages, gross margin fluctuated greatly under the influence of settlement nodes.

It continues to expand in targeted investment areas and plans to participate in the Nanjing Lvdong New Materials Venture Capital Partnership. The target focuses on investing in fields such as biosynthesis and green chemicals, clean new energy materials, advanced manufacturing materials, and new materials for green consumption, etc., matching the company's target investment areas. At the same time, it can also form links with the company's main park development and operation business. Through continuous layout in the above fields, it can effectively supplement the business chain of park development and operation and enhance overall competitiveness.

It officially withdrew from the Huaneng Taicang Power Plant Phase III project to raise capital for new energy and new environmental protection projects.

The Huaneng Taicang Power Plant Phase III project plans to build 2 1000MW ultra-supercritical secondary reheating coal-fired power generators at the expansion end of the second phase of the project, thereby reducing the unit's coal consumption and pollutant emissions. At the end of September, the company decided to withdraw from the project and transfer shares, with the aim of concentrating more capital in the fields of new energy and new environmental protection to accelerate its business expansion.

Risk warning: Park development progress is lower than expected, and green power and industrial investment development are lower than expected