Introduction to this report:

The profitability of the company's wind power project is expected to exceed expectations, and the company's performance is about to enter a period of explosion.

Key points of investment:

Maintaining the “Overweight” rating: The company's performance explosion period is approaching, and the 2023-2025 EPS will be maintained at 0.60/0.99/1.12 yuan. Maintain the target price of 16.52 yuan and maintain the “Overweight” rating.

The company's profits from starting wind power production are expected to exceed expectations, and the performance is about to enter a period of explosion. The market believes that the estimated yield of the company's new wind power projects is low, making it difficult to drive rapid growth in the company's wind power project; we believe that the estimated yield of the company's wind power project is conservative. In fact, key parameters such as grid electricity prices, usage hours, and construction costs are expected to be superior to the estimated estimated values of the project. The company's recent wind power project will drive the company's performance into a period of explosive growth.

Unique information and logic: 1) The average annual wind speed of the Yongning wind farm site is much higher than the average annual wind speed in Yunnan Province, but the estimated number of hours used is conservative (the estimated annual equivalent full load hours of the project is only 2,483 hours, which is 179 hours lower than the average number of hours used by wind power in Yunnan Province from 2018 to 2022); 2) We estimate the average price of electricity sold by sellers in Yunnan Province for the whole year of 2023 (+0.0225 yuan/kilowatt-hour compared to the previous year). Tight supply and demand and policies to promote new energy in the province In the context of installed capacity development, it is expected that the company's market-based electricity prices for wind power projects will still have room to rise; 3) The company's estimated unit investment cost range for wind power projects is 6,300 to 6800 yuan/kW. As the installed cost per fan unit continues to decrease and financing costs decline, the actual construction cost of the company's wind power project is expected to be lower than the estimated value (the wind power market unit investment cost in November 2023 is about 4,500 to 5,200 yuan/kilowatt).

Catalysts: Approved and under construction new energy projects are being implemented at an accelerated pace, and the financial performance of the commissioned projects is good.

Risk warning: Demand for electricity falls short of expectations, feed-in tariffs in Yunnan Province fall short of expectations, salt and nitrogen business operations fall short of expectations, asset acquisition progress and plans fall short of expectations, etc.