The company is delivering the Moray West project, and delivery performance barriers continue to accelerate subsequent orders. The company will bid 48 sets of single piles, 30 sets of transition sections, and 12 sets of offshore wind power towers for the Moray West project in the UK in 2022. The 2023Q3 completed a total of five ships shipped out of port, and the last single ship will be shipped within the year according to the delivery plan. The project is the first single pile product delivered by the company overseas, and the company will have its first project delivery performance in 2024, which strongly supports the company to win the bid for subsequent overseas offshore orders. The company is currently the only supplier in the Asia-Pacific region to export offshore products to the European market. With its first-mover advantage, the company will fully benefit from the recovery of European sea winds.
Considering the uncertainty and order delivery cycle of the overseas Haifeng project, we lowered the company's profit forecast for 2023-2025. It is estimated that the company will achieve net profit of 6.48/9.47/1,362 billion yuan in 2023-2025, (original value: 10.22/17.95/2.174 billion yuan), EPS of 1.02/1.48/2.14 yuan, corresponding to the current stock price PE of 25.8/17.7/12.3 times. The company's European layout has a clear first-mover advantage, maintaining a “buy” rating.
The British government raised the maximum price limit for ocean breezes. AR6 ocean wind competition volume is about to recover. On November 16, the British government announced an increase in the auction price limit for ocean wind projects. The fixed ocean wind project increased from 44 pounds/MWh to 73 pounds/MWh, an increase of 66%, and the floating ocean wind project increased from 116 pounds/MWh to 176 pounds/MWh, an increase of 52%. In addition, in the new round of CFD allocation (AR6), the Haifeng project will also have an independent capital pool to ensure healthy competition. Due to inflation and supply chain costs, etc., no offshore wind farms participated in the bidding for the AR5 allocation announced in September. The British government aims for the installed scale of offshore wind power to reach 50 GW by 2030, of which the floating offshore wind project will reach 5 GW. In 2022, the UK Seabreeze added 1.18 GW of installed capacity and a cumulative installed capacity of 13.92 GW. The Seafreeze market has great potential for development. This adjustment of the maximum price limit for Seabreeze auctions will greatly encourage Seafreeze owners to develop momentum, and a recovery in bidding volume for UK Seabreeze projects is imminent in 2024.
Risk warning: Overseas policy changes, offshore wind power project construction falls short of expectations, raw material price fluctuations, risk of increased industry competition, the company's overseas bid winning situation falls short of expectations, and the company's production capacity release falls short of expectations.