Introduction to this report:

The company released a quick performance report. In 2023, it achieved revenue of 1,036 billion yuan, an increase of 35% over the previous year; net profit after deducting non-return to mother was 77.5 million yuan, an increase of 50% over the previous year. Strong demand in the electricity market has led to rapid growth in the company's performance.

Key points of investment:

Maintain an increase in holdings rating. According to the performance report, we lowered the company's projected net profit for 2023 and 2024-2025 to 0.87 (-14%), 1.36 billion yuan, and 177 million yuan respectively, corresponding EPS to 0.71, 1.10, and 1.44 yuan, respectively, maintaining the target price of 30.01 yuan, and maintaining the “increase” rating.

The performance was in line with expectations. The company released a quick performance report: 1) In 2023, the company achieved operating income of 1,036 million yuan, a year-on-year increase of 35%; achieved operating profit of 102 million yuan, a year-on-year increase of 29%; realized net profit of 86.78 million yuan, an increase of 48% over the previous year; net profit after deducting non-return to mother was 77.5 million yuan, an increase of 50% year on year; basic earnings per share were 0.71 yuan, up 14.52% year on year. 2) At the end of the 2023 reporting period, the company's total assets were 1,969 billion yuan, up 17% from the beginning of the period; equity attributable to parent owners was 889 million yuan, an increase of 10% over the beginning of the period. The operation was steady, and the performance was in line with expectations.

Strong demand in the electricity market has led to rapid growth in the company's performance. The main reasons for the high increase in the company's revenue and profit are: 1) benefiting from a series of favorable policies such as the acceleration and upgrading of the country's investment in new thermal power generation, increasing market demand for the company's traditional main products; 2) At the same time, the company adheres to a diversified development strategy, continuously optimizes the industrial layout, consolidates technological research and development innovation, and the new product steel slag energy saving and environmental protection treatment system is officially launched on the market, making innovative breakthroughs.

Investment suggestions: We reaffirm that 1) with the rapid increase in the scale of renewable energy installations, it is more certain that thermal power will implement large-scale flexibility transformation; 2) as the marketization of auxiliary power services progresses rapidly, thermal power companies' enthusiasm for flexible transformation will increase in the future; 3) Qingda, as an industry leader in mastering core technology, will benefit from the explosion and rapid growth in industry demand. Waiting for the volume of orders for the company's thermal power flexibility transformation.

Risk warning: Industry policy progress falls short of expectations, fluctuating raw material prices, seasonal risk of revenue and operating performance, risk of bad debts due, etc.