Revenue and net profit both increased in the first three quarters of 2023. The company's main business is hydropower and photovoltaic power generation. As of the first three quarters of 2023, the installed capacity of the company's power generation equity was 3,424,400 kilowatts, of which the installed capacity of hydropower, wind power, and photovoltaics was 1,638,000 kilowatts, and 670,000 kilowatts, respectively. As new construction projects were connected to the grid and electricity prices settled for the original project increased, the company's revenue and net profit for the first three quarters were 1,912 million yuan and 559 million yuan respectively, up 22.62% and 52.69% from the previous year.

Benefiting from declining new energy installation costs and industry policies, the number of new installed capacity in the landscape has increased rapidly, and the prosperity of the industry is still expected to continue. The price of a complete wind power unit fell from 4,842 yuan/kW in 2019 to 1,822 yuan/kW in 2022, a drop of 62.3%. There was still a slight decline in the first three quarters of 2023; the price of mainstream photovoltaic modules fell rapidly from 1.84 yuan/watt at the beginning of the year. The current price is about 1.14 yuan/watt, a drop of nearly 40%. The decline in wind and wind installation costs is conducive to increasing the yield of landscape projects. Facing good opportunities for industry development, the group company actively exploited and obtained a 6 million kilowatt new energy project for its own use at the Tengger Desert base. As a subsidiary of the group, the company may benefit.

Start a new situation of collaborative development with central enterprises and power companies. Changjiang Electric Power became the company's second largest shareholder through fixed increases and increases in holdings. It holds about 289 million shares of the company, with a shareholding ratio of 18.03%. The investment of Changjiang Electric Power Co., Ltd. opens up a new situation of collaborative development between central enterprises and local state-owned enterprises, which is conducive to improving the company's governance structure and enhancing the company's overall strength.

Earnings forecasts and ratings. We forecast that the company's net profit for 2023-2025 will be 568 million yuan, 603 million yuan, and 661 million yuan respectively, up 88.30%, 6.10%, and 9.52% year on year. Based on the closing price of November 20, 2023, the corresponding PE is 15.8X, 14.9X, and 13.8X, respectively. Given the company's superior geographical location, leading position in the power industry in Gansu Province, and strong support from controlling shareholders in new energy projects, we maintain the company's “increased holdings” rating.