Maintain the “gain” rating: Considering the company's new energy installation and production pace, maintain the 2024-2025 EPS 0.99/1.12 yuan, and give 2026 EPS 1.38 yuan. Maintain the target price of 16.52 yuan and maintain the “Overweight” rating.

The 4Q23 results were in line with expectations. The company's 2023 revenue was 2.90 billion yuan, +11.2% year over year; net profit to mother was 482 million yuan, +65.4% year over year; 4Q23 revenue was 940 million yuan, +11.6% year over year, and net profit to mother was 150 million yuan, +74.4% year over year, in line with the performance report guidelines. The company plans to pay a dividend of 0.16 yuan per share in 2023, accounting for 30.6% of net profit attributable to mother.

New energy growth drives performance, and project profitability is excellent. The company's 2H23 performance growth was mainly driven by growth in the new energy sector: 1) the net profit of the company's new energy division was 110 million yuan, +284% year over year; 2) the company's feed-in electricity volume in 2023 was 2.03 billion kilowatt-hours, +127% year over year. By the end of 2023, Yongning Wind Power had completed the commissioning of all units, and its actual cumulative investment amount (2.46 billion yuan) was significantly lower than the planned investment amount (4.73 billion yuan). We estimate that the total investment saving space for the project was.

We estimate that the average ROE of the company's new energy division is 12.9%, and the profit quality of project assets is excellent. We expect the profitability of newly put into operation projects to remain at a high level, and the company's performance is expected to explode as subsequent new energy projects are put into operation.

There are plenty of reserve projects, and installed capacity is expected to continue to grow. By the end of 2023, the company had 1.6 GW of installed capacity, 2.1 GW of approved installation plan, 0.5 GW of installed capacity under construction. The construction progress of the first phase of the company's Jinzhong Wind Farm (0.35 GW) was slightly delayed due to early approval such as forest grass. We expect that the company can make up for the new 2024E installation schedule, and sufficient project reserves will lay the foundation for continued high growth.

Risk warning: Electricity demand falls short of expectations, salt and nitrate business operations fall short of expectations, etc.