Incident: The company released its 2023 annual report. In 2023, the company achieved revenue of 37.64 billion yuan, -5.6% year-on-year, and net profit to mother of 6.25 billion yuan, +22.3% year-on-year.
The results were slightly lower than expected, with an asset impairment of $2.19 billion. In 2023, the company achieved revenue of 37.64 billion yuan, -5.6% year on year, net profit of 6.25 billion yuan, +22.3% year on year, net profit without return to mother of 6.24 billion yuan, +8.7% year on year. Of these, 23Q4 achieved operating income of 9.53 billion yuan and realized net profit of 140 million yuan. The overall performance was slightly lower than our previous expectations. The main reasons may be: (1) Affected by factors such as the “big generation and small” transformation plan of wind farms, the company's estimated assets depreciated 2.19 billion yuan in 23; (2) electricity prices were slightly lower than our previous expectations. Reduced, the company's average feed-in price was RMB 443 per megawatt-hour (excluding VAT, same below), a year-on-year decrease of 25 yuan/megawatt-hour; of these, the average feed-in price for wind power was 457 yuan/megawatt-hour, a year-on-year decrease of 24 yuan/megawatt-hour, mainly due to the expansion of the wind power market transaction scale and the increase in affordable projects; the average feed-in price of PV was 308 yuan/megawatt-hour, a year-on-year decrease of 95 yuan/megawatt-hour, mainly due to the fact that the newly put into operation were all affordable projects.
Wind and electricity production is growing steadily, and thermal power output is being squeezed. The company generated 76.23 billion kilowatt-hours of electricity in 2023, +7.9% year-on-year. Among them, wind power generation capacity was 61.35 billion kilowatt-hours, +5.2% year on year. The average number of hours used was 2,346 hours, an increase of 50 hours over 2022, mainly due to the optimization of the company's operational efficiency and the year-on-year increase in average wind speed. PV and other renewable energy generation capacity was 4.55 billion kilowatt-hours, +159.8% year-on-year, mainly due to the rapid growth of installed photovoltaics; the power generation capacity was 10.32 billion kilowatt-hours, down 2.4% year on year, mainly due to a sharp increase in the installed capacity of new energy in Jiangsu Province, which squeezed the space for thermal power generation, resulting in a decrease of 135 hours compared to 2022.
Resource reserves are sufficient, and installed scenery is expected to maintain a high growth rate. By the end of 2023, the company's holding installed capacity reached 35.6 GW, an increase of 4.5 GW over the previous year, including 27.8 GW of wind power, an increase of 1.6 GW over the previous year. In 2023, the company added 54 GW of resource reserves (24.65 GW of wind power, 23.95 GW of photovoltaics, 5.4 GW of storage and energy storage), all located in regions with good resources; the annual development index exceeded 22.75 GW, of which the new energy development index was 19.84 GW (5.07 GW of wind power, 14.77 GW of PV), 2.38 GW of pumped energy storage, and 0.53GW of independent energy storage.
Profit forecast and investment suggestions: We expect the company's revenue for 2024-2026 to be 39.88 billion yuan, 437.6 billion yuan, and 47.32 billion yuan respectively, with growth rates of 5.9%, 9.7%, and 8.1% respectively, and net profit to mother of 77, respectively.
At 9.1 billion yuan, 8.415 billion yuan, and 9.07 billion yuan, the growth rates were 24.7%, 8.0%, and 7.0%, respectively, maintaining the “buy” rating.
Risk warning: Wind and wind construction falls short of expectations; risk of electricity price fluctuations; policy risk.