Core views
The company released its 2023 annual report, and achieved full-year revenue of 406 billion yuan, a year-on-year increase of 10.3%, net profit to mother of 7.99 billion yuan, an increase of 2.1% year-on-year, after deducting non-net profit of 7.16 billion yuan, an increase of 25.3% year-on-year, and the annual net profit growth rate changed from negative to positive. Benefiting from the boom in new energy investment, the amount of new contracts signed throughout the year increased by 22.4% year on year, of which orders along the “Belt and Road” increased 62.0% year over year. The company's new energy investment and operation accelerated, adding 4.75 million kilowatts of installed capacity of Fengguang New Energy throughout the year, obtained a new energy investment target of 2010 million kilowatts, and also accelerated deployment in the fields of pumped energy storage, hydrogen energy, and new energy storage.
occurrences
The company released its 2023 annual report, achieving operating income of 406.03 billion yuan, a year-on-year increase of 10.3%, and realized net profit of 7.99 billion yuan, an increase of 2.1% year-on-year, and realized deducted non-net profit of 7.16 billion yuan, an increase of 25.2% over the previous year.
Brief review
The net profit growth rate for the whole year changed from negative to positive. The company achieved operating income of 406.03 billion yuan in 2023, up 10.3% year on year, net profit of 7.99 billion yuan, up 2.1% year on year, deducted non-net profit of 7.16 billion yuan, up 25.2% year on year. The growth rate of net profit after deducting non-net profit was higher than net profit due mainly to government subsidies and non-current asset disposal in the same period of the previous year being 2.2 billion yuan higher than this year. Net profit for the fourth quarter was 4.92 billion yuan, up 35.2% year on year, after deducting non-net profit of 4.28 billion yuan, up 48.6% year on year, driving the annual net profit growth rate to change from negative to positive. The main reasons were: 1) gross margin for the fourth quarter increased 5.6 percentage points month-on-month, up 0.4 percentage points year on year; 2) the income tax rate for the fourth quarter decreased by 12.2 percentage points year on year, and income tax for the single quarter was 580 million yuan less than the same period last year.
Benefiting from new energy construction going overseas, the company's new orders continued to grow. The company signed new orders of 1283.7 billion yuan in 2023, up 22.4% year on year. Among them, new energy and comprehensive smart energy orders were signed at 529.2 billion yuan, up 26.1% year on year, and the “Belt and Road” market signed a number of new energy projects of 267.4 billion yuan, an increase of 62.0% year on year. Overseas, a number of new energy projects such as Vietnam wind power projects, Saudi Arabia's 2.6 GW photovoltaic project, and Mongolian energy storage projects have achieved good results.
Investment and operation of new energy sources are being accelerated. In 2023, the installed capacity of Fengguang New Energy was added to 4.75 million kilowatts. As of the end of 2023, the company held an installed capacity of 11.6 million kilowatts, of which 9.51 million kilowatts of new energy were installed. New energy operations achieved revenue of 3.72 billion yuan for the year, an increase of 58.8% over the previous year, and a gross profit margin of 47%, which is 34.7 percentage points higher than the overall gross margin. The company obtained an investment target of 2010 million kilowatts of new energy throughout the year, and at the same time accelerated deployment in the fields of pumped energy storage, hydrogen energy, and new energy storage. The sector is expected to further increase the company's profits in the future.
Keep the purchase rating and target price of $3.07 unchanged. We expect the company's net profit to be 91.0/102.9/11.55 billion yuan in 2024-2026 (the original forecast was 10.37/12.37 billion yuan in 2024-2025), and the corresponding EPS would be 0.22/0.25/0.28 yuan, respectively. We are optimistic that the company will use its technological and scale advantages to achieve rapid expansion in the field of new energy and countries along the “Belt and Road”, actively transform into a new energy investment and operation business, and keep the purchase rating and target price of 3.07 yuan unchanged.