Key points of investment
Net revenue and profit increased steadily in the first three quarters, and the scale of photovoltaic power plants increased steadily.
In the first three quarters of 2023, the company achieved revenue of 544 million yuan, an increase of 4.83% over the previous year, and realized net profit of 186 million yuan, an increase of 15.49% over the previous year. The third quarter achieved revenue of 212 million yuan, a year-on-year decrease of 5.45%; net profit of 77 million yuan was realized, a year-on-year decrease of 4.87%; mainly due to the steady increase in the company's distributed photovoltaic installations.
The scale of power plants continues to grow, and convertible bonds are being increased to promote photovoltaic development.
The company is actively promoting the development of photovoltaic power plants. By the end of 23H1, the company had accumulated a grid-connected capacity of self-owned distributed photovoltaic power plants of about 782 MW, an increase of about 56 MW compared to the beginning of 2023. There are also about 169 MW of self-owned distributed photovoltaic power plants under construction, to be built and to be contracted. The company raised 880 million yuan in convertible bonds for distributed photovoltaic power plant construction projects and repayment of working loans. The proposed construction scale reached 166.26 MW; on October 31, the company announced the results of convertible bond issuance, financing and implementation of convertible bond projects, and increased the development and construction of photovoltaic power plants.
Lay out the charging and storage business to create a second growth curve.
The company relies on existing distributed photovoltaic roof resources to lay out charging piles and energy storage business; in the first half of 2023, the company achieved a total revenue of 2,6429 million yuan in the charging pile business. The average number of effective charging hours for charging piles that have been in stable operation can reach 2 hours per day, and the payback period is about 3-4 years. The company is also laying out industrial and commercial energy storage business. The company has already implemented a number of “Smart Microgrid” demonstration projects for networked light storage and charging in the early stages. Through the projects, it has prepared a solid technical foundation and rich implementation experience, and will continue to promote the implementation of industrial and commercial energy storage projects around distributed customer resources in the future.
Profit forecasting and valuation
Lower the profit forecast and maintain the “buy” rating. The company is leading the domestic industrial and commercial photovoltaic operation, laying out charging and storage to create an integrated platform. Considering fluctuations in industrial and commercial electricity prices, we lowered the company's net profit from 23-25 to 228 million yuan, 4.13 million yuan, and 532 million yuan respectively (2.55, 4.46, and 608 million yuan respectively before the reduction), corresponding to EPS of 0.46 yuan, 0.83 yuan, and 1.06 yuan; corresponding PE was 27, 15, and 12X respectively. Maintain a “buy” rating.
Risk warning: Project construction demand falls short of expectations; raw material price fluctuations; risk of electricity price fluctuations.