The company achieved net profit of 3.55 billion yuan in 2023, an increase of 24% over the previous year. In 2023, the company achieved operating income of 60.68 billion yuan, an increase of 10% over the previous year; achieved net profit of 3.55 billion yuan, an increase of 24% over the previous year; and realized net profit of 2.58 billion yuan without return to mother, an increase of 8% over the previous year. Corresponding to the 23Q4 single quarter, the company achieved operating income of 15.91 billion yuan, up 7% year on month; realized net profit of 640 million yuan, up 78% year on year, down 30% month on month; realized net profit deducted from mother - 110 million yuan, down 146% year on year and 113% month on month.
Profits in the coal power equipment and modern manufacturing services industry grew steadily, and wind power losses dragged down performance. The company's business is mainly divided into five major sectors: renewable energy equipment, clean and efficient energy equipment, engineering and trade, modern manufacturing services, and emerging growth industries. The profit contribution mainly comes from the coal power business under clean and efficient energy equipment. The revenue of this business in 2023 was 13.09 billion yuan, up 29% year on year; gross profit margin was 23%, up 1 pcts year on year. The revenue of the modern manufacturing service industry in 2023 was 5.38 billion yuan, up 57% year on year; gross profit margin was 50%, down 4 pcts year on year. We estimate that the coal power business and the modern manufacturing service industry are the main sources that make up the deduction of non-net profit in 2023, but overall performance was dragged down by losses in the wind power business.
Energy insurance and supply compounded growth in supporting demand, and orders for coal and electricity are full. In 2023, the country started 99.8 GW of new coal power, an increase of 49% over the previous year, and project construction accelerated significantly. The company is one of the main equipment manufacturers for coal-fired units in China, with a market share of about 40%. The company has a complete energy equipment development system, and is in a leading position in the industry in various aspects such as thermal power 1000MW grade units and large-scale circulating fluidized bed boilers. In 2023, the company signed new orders of 86.53 billion yuan, a year-on-year increase of 32%. The year-on-year growth rate increased significantly from 16% in 2022; among them, the clean and efficient energy equipment business, which mainly focuses on coal and electricity, signed new orders of 34.13 billion yuan, an increase of 57% over the previous year.
Construction of pumped energy storage is being accelerated, and equipment delivery is expected to be brought forward. In 2023, 64.6 GW of new savings projects were approved. Although the year-on-year decline was 6%, the approval scale was far higher than the historical construction scale. The company is one of the main equipment manufacturers of pumping units in China. The overall level of development has reached the advanced level of the industry, with a domestic market share of 38%. It is the first power generation equipment manufacturer in China that also has the ability to develop and debug suction units, and will continue to benefit from the prosperity and development of the pumped energy storage industry.
Risk warning: the risk of a sharp rise in raw material prices; the risk of order delivery delays or default; the risk of downstream energy project construction progress falling short of expectations; the risk of increased competition in the fan industry.
Investment advice: Due to losses in the company's fan business in 2023, considering the intensification of competition in the fan business and lowering the company's profit forecast for 2024-2025, the company's net profit for 2024-2026 is estimated to be RMB 44.5/51.3/4.45 billion yuan (originally forecast RMB 53.0/6.34 billion yuan for 2024-2025), +25%/+15%/-13% YoY, and diluted EPS is 1.43/1.65/1.43 yuan, corresponding to the 2024-2026 dynamic PE is 11/9/11 Double, maintaining the “gain” rating.