Incident: The company announced its 2023 performance forecast. It is expected to achieve net loss of 0.68%-243.32% year-on-year for the full year of 2023, a year-on-year decrease of 233.35%-243.32%; net loss deducted from non-mother of 0.97-117 million yuan, a year-on-year decrease of 397.87%-439.58%.
Significant impairment and poor downstream demand have put pressure on performance: The company's performance loss in 2023 is mainly due to: 1) Since 2019, the company has adopted a stricter expected credit loss rate, and the bad debt preparation rate is relatively high under the same age. Due to the large number of completed projects during the offshore wind power “rush to install” and the settlement process was slow, the cumulative amount of asset impairment losses and credit impairment losses in 2023 was about 196 million yuan; 2) After the “rush wave” of offshore wind power in 2021, market demand for new projects declined in stages; after the “affordable Internet” of offshore wind power, the overall price of equipment products declined, and the unit price of the company's product units also declined; the depreciation and amortization amount increased, and the cumulative production capacity utilization rate was relatively low, and the unit cost rose; some construction projects were ordered and the construction schedule was relatively low. impact, Delivery was not completed, and the profit scale was reduced; 3) Due to poor wind speed conditions in 2023, the annual feed-in electricity generation of the offshore wind farm in which the company participated in the investment decreased, resulting in a sharp drop in investment income compared to last year; 4) In 2023, the impact of the company's non-recurring profit and loss on net profit was about RMB 29 million.
Offshore wind power reserve projects are sufficient, and the industry's inflection point is imminent: although the offshore wind power industry has been affected by various factors and the pace of development has slowed down in the past two years, based on the “14th Five-Year Plan” offshore wind power development plans of domestic coastal provinces and cities, the demand for more than 30 GW of grid-connected installed capacity has not been released during the “14th Five-Year Plan” period. Offshore wind power projects are rich in reserves, and the offshore wind power industry is expected to usher in large-scale development and construction from 2024 to 2025. As the commissioning of the company's various bases progresses steadily, it is expected to benefit from a recovery in performance as the industry reaches an inflection point.
Investment advice: We expect the company to achieve operating income of 18.20/68.25/10.785 billion yuan in 2023-2025, and net profit to mother - 0.86/8.36/1,274 billion yuan. The corresponding PE was -/12.25/8.04 times, respectively. It was covered for the first time, and a “gain” rating was given.
Risk warning: offshore wind power project construction falls short of expectations; risk of fluctuating raw material prices; industry competition exacerbates risk