Event: The company released its report for the third quarter of 2023. In the first three quarters of 2023, the company achieved revenue of 1,635 billion yuan, an increase of 47.79% over the previous year, and net profit of 160 million yuan, an increase of 17.58% over the previous year. Q3 The company achieved revenue of 378 million yuan, a year-on-year decrease of 6.71%; net profit of 44.0718 million yuan, a year-on-year decrease of 20.03%; net profit after deduction of 42.5039 million yuan, a year-on-year decrease of 23.14%.
Q3 Performance is under pressure, and fee control is good. Q3 The company achieved revenue of 378 million yuan, -6.71% year-on-year; net profit of 44.0718 million yuan, -20.03% year-on-year. In terms of cost rates, in the first three quarters, the company's sales, management, and R&D expenses were 3.42%/7.22%/6.48%, respectively, which changed -1.36pct/ -0.34%/+0.76pct compared to the same period last year, and the cost control capacity continued to be optimized.
With scientific planning of energy storage construction, the company's regional competitive advantage is remarkable. On October 25, the National Development and Reform Commission and the National Energy Administration issued the “Guiding Opinions on Strengthening the Stability of Power Systems under the New Situation”, stating that energy storage construction should be arranged scientifically, and energy storage should be scientifically planned and configured according to needs. As an energy storage construction platform owned by China Southern Power Grid, the company has a deep understanding of grid side+power side requirements, leading technical level and rich implementation experience, and has significant advantages in contracting energy storage EPC projects in the South Grid region; the continued decline in lithium carbonate prices is expected to optimize the cost of energy storage EPC projects, and we expect the revenue of the company's energy storage business to continue to rise high in the next few years.
Controlling shareholders extended the lock-up period for restricted shares, and core management increased their shareholding. Guangdong Power Grid, the controlling shareholder of the company, and China Grid Industrial Investment, a co-actor, extended the lockdown period of 43.06% and 16.49% of the company's current total share capital for 12 months from December '24 to December '25, respectively. Furthermore, some of the company's directors, supervisors and managers plan to increase their holdings of the company's shares with their own capital of no less than 4.4 million yuan and no more than 8.8 million yuan; we believe this move shows the confidence of shareholders and management in the company's development.
Investment recommendations and valuation: Based on the company's three-quarter performance report, we expect the company's revenue from 2023 to 2025 to be 3.44 billion yuan, 4.00 billion yuan, and 8.167 billion yuan respectively, with revenue growth rates of 92.4%, 42.3%, and 66.7% respectively, net profit of 332 million yuan, 506 million yuan and 774 million yuan respectively, with growth rates reaching 61.5%, 52.3% and 52.9% respectively, maintaining the “increased holdings” investment rating.
Risk warning: increased industry competition; excessive customer concentration; risk of rising upstream component prices