Key points of investment
Incident: The company released its 2023 annual report, with 2023 revenue of 50.46 billion yuan, an increase of 8.7%; net profit to mother was 1.33 billion yuan, a decrease of 44.2%. Among them, 2023Q4 revenue was 21.14 billion yuan, up 4.3% from the same period, and 104.9%; net profit to mother was 0.7 billion yuan, up 278% from the same period, and 644%. The gross margin in 2023 was 17.1%, down 0.5pct; 2023Q4 gross profit margin was 16.5%, up 5.4pct, and down 1.6pct.
The fan was exported to 13.8 GW in '23, slightly exceeding expectations, and the expected shipment in '24 is 18-20 GW. In 2023, revenue from fans and components was 32.9 billion yuan, up 1% from the same period, with a gross profit margin of 6.4%, and an increase of 0.2 pct. The company exported 13.8 GW in 2023 (we expect to ship 16 gw), of which Q4 sold 4.9 GW, -29%/+56% month-on-month. The estimated gross margin of Q4 fans and components was about 8-9%, and the increase was mainly due to the delivery of more components with high gross margins (estimated 10% +). Looking at submodels, large-scale models continued to advance, and the proportion of 6MW+ models continued to increase in the fourth quarter, with sales of 2.9 GW, accounting for 59%, and an increase of 4 pct; 4-6MW models sold 1.9 GW, accounting for 39%. The company expects to ship 18-20GW in 2024, an increase of 12% + over the same period.
The total number of orders placed during the peak delivery season in Q4 fell slightly by 4% month-on-month, and the proportion of large-scale projects continued to increase. As of 23Q4, the company's total order volume reached 30.4 GW, -4% month-on-month, with an external order pending execution of 20.71 GW (10.4GW for 4-6MW models, 9.5GW for 6MW+ models); the unsigned external order was 9.1 GW (3.9 GW for 4-6MW models, 5.2 GW for 6MW+ models), and the overall 6MW+ model reached 14.6GW, with 6MW+ accounting for a further increase of 4pct.
Wind farm development continues to expand, and revenue from power station products is expected to exceed 10 billion dollars in 24 years. In 2023, the company's wind farm investment and development revenue was 10.9 billion yuan, up 58%. Among them, power generation revenue was 6.4 billion yuan, down 7%, and power plant commercialization revenue was about 4.5 billion yuan. The overall wind farm business gross profit margin was 47.3%, a decrease of 18 pcts, mainly due to the lower gross margin of the commercialization business of new power plants. In 2023, domestic and foreign self-operated wind farm equity connected to the grid added 1.79 GW, an increase of 3% over the same period. The cumulative installed capacity of self-operated equity was 7.3 GW, an increase of 3% over the same period, and the equity capacity under construction was 2.35 GW, or -11% compared to the same period last year. In 2023, the company transferred 1,568 MW of wind farms (including 822 MW of equity transfers and more than 740 MW of power station transfers), and the equity transfer contributed 1.72 billion yuan in investment income, an increase of 54%. In 2024, the company expects revenue from power station products to exceed 10 billion dollars.
In 2023, the average power generation time of the company's domestic self-operated wind farms was 2441 hours, higher than the industry's 216 hours. It continued to maintain high standards, demonstrating the strength of the company's fans.
The scale of the post-wind power service and water services business continued to grow, and the energy storage business achieved 0-1. In 2023, wind power services achieved revenue of 5.24 billion yuan, a decrease of 7%. Of these, post-service revenue was 3.03 billion yuan, an increase of 23%, and post-service capacity was about 31 GW, +10.2% year-on-year. The gross margin for wind power services also fell by 4 pct to 19.8%. In 2023, the company's water business revenue was 1.03 billion yuan, an increase of 14%. The cumulative operating scale totaled 2,8395 million tons/day, which was the same as the previous year. The energy storage business company achieved a breakthrough of 0-1 in 2023 and built a 3GWh production capacity, covering domestic large storage, industrial and commercial storage, and international scenarios. It won 3-4 GWh of domestic bids throughout the year, ranking among the top four in the country.
Profit forecast and investment rating: Based on the intensification of competition for large-scale fans, we lowered our 2024-2025 profit forecast. We expect net profit to be 15.1/18.3/2.02 billion yuan in 2024-2026 (the value before 2024-2025 was 20.1/2.4 billion yuan), an increase of 14%/21%/11%, corresponding to PE21/17/16 times, and maintain the “increase” rating.
Risk warning: increased competition, policies falling short of expectations, etc.