Core views
The company released its 2023 annual report. In 2023, the company achieved total revenue of 60.677 billion yuan, an increase of 9.6% over the previous year, and achieved net profit of 3.55 billion yuan, an increase of 24.4% over the previous year.
In 2023, the company added 86.532 billion yuan in orders, an increase of 31.95% over the previous year, recording an increase in order growth in the past 5 years. Judging from the revenue growth rate of various businesses, the revenue growth rate of the combustion engine, power plant services, and nuclear power business was relatively fast, at 107%, 49%, and 41%, respectively. In 2023, the company added 86.532 billion yuan in orders, an increase of 31.95% over the previous year, and the growth rate of coal and electricity orders was significant; the company distributed cash dividends of 4.75 yuan (tax included) for every 10 shares, with a total cash dividend of 1,481 billion yuan, accounting for 41.7% of the net profit to the mother. The company's dividend ratio has increased dramatically in the past 2 years.
occurrences
The company released its 2023 annual report. In 2023, the company achieved total operating revenue of 60.677 billion yuan, a year-on-year increase of 9.6%, and achieved net profit of 3.55 billion yuan, an increase of 24.4% over the previous year; net profit without return to mother was 2,576 billion yuan for the whole year, an increase of 8.2% over the previous year.
Brief review
Q4 Net profit loss after deducting non-return to mother is expected to increase the company's revenue and non-profit growth rate for the full year of '23, mainly due to losses in the wind power business, mainly due to the good growth in the company's orders in recent years.
The company had many non-recurring profits and losses throughout the year, close to 1 billion yuan. The main ones were: (1) investment income of 750 million yuan: mainly investment income from disposal of increased shares in Sichuan Energy Investment; (2) other income of 4.4 million yuan: mainly enjoying the advanced manufacturing industry input tax credit policy.
In the Q4 2023 quarter, the company achieved operating income of 15.91 billion yuan, up 7.5% year on year, up 7.1% month on month, and realized net profit of 639 million yuan, up 80.1% year on year and down 29.8% month on month. 2023Q4 achieved net profit deducted from non-mother's net profit - 113 million yuan, turning losses year on year over month.
The company's Q4 revenue increased, but net profit after deduction was low, showing losses, which are expected to be mainly due to losses in the wind power business; in 2023, the gross profit margin of the company's wind power business was 9.94%, a year-on-year decrease of 2 pcts. The second half of the year was slightly lower than in the first half of the year. The overall profit of the fan industry was under pressure, and the company's loss situation was in line with the industry.
By business, the revenue growth rate of combustion engines, power plant services, and nuclear power ranked in the top three. In terms of gross margin of thermal power and nuclear power, revenue growth rates for combustion engines, power plant services, nuclear power, and business were 107%, 49%, and 41%, respectively; in addition, general engineering contracting and thermal power businesses grew at 31% and 29%, which also achieved high year-on-year growth; trade business increased slightly by 6% year on year; wind power, hydropower, emerging growth, and financial services business revenue decreased by 11%, 7%, 19%, and 5%, respectively.
In terms of gross margin, the gross profit margin of 2023H1 thermal power increased to 19.0%, and 2023H2 to 28.4%, an increase of 9.4pct; in addition, the gross margin of nuclear power increased from 15.7% in 2023H1 to 28.6%, an increase of 12.9pct. The gross margin of thermal power and nuclear power increased significantly, which is expected to be due to strong demand for equipment and price increases.
The company's orders increased year on year in 2023, setting the increase in order growth in the past 5 years. The company added 86.532 billion yuan of new orders in 2023, up 31.95% year on year. The growth rate of new company orders in 2019-2022 was 15%, 23%, 14%, and 16% year on year respectively. The 2023 order growth rate was the highest in recent years.
By order structure, clean and efficient energy equipment (thermal power, nuclear power, combustion engines) increased 57% year on year; orders for renewable energy equipment (hydropower, wind power) increased 13% year on year; and complete furnace electromechanical projects increased by more than 100% year on year.
The dividend ratio was over 40%, a significant increase over the previous year
The company paid a cash dividend of 4.75 yuan (tax included) for every 10 shares, with a total cash dividend of 1,481 billion yuan, accounting for 41.7% of the net profit due to mother. The company's dividend ratio in 2020-2022 was 30.2%, 31.3%, and 36.6%, respectively, and the company's dividend ratio has increased dramatically in the past 2 years.
Profit forecast and valuation: We expect the company to achieve operating income of 660.42 billion yuan, 720.59 billion yuan, and 75.930 billion yuan in 2024, 2025, and 2026, respectively, and achieve net profit of 40.73 billion yuan, 48.28 billion yuan, and 5.291 billion yuan, corresponding PE of 12.1, 10.2, and 9.3X, respectively.
Risk warning
The amount of completed investment in power infrastructure falls short of expectations: the company's main power equipment, performance is highly correlated with investment in wind power, gas power, thermal power, hydropower, and nuclear power. If the completed amount of power investment falls short of expectations, it will affect the company's performance; upstream raw material prices fluctuate greatly: price fluctuations such as upstream steel will affect the company's performance; downstream electricity demand falls short of expectations: power investment is related to electricity demand. If electricity demand is weak, it will affect investment in new power sources, which in turn affects the company's performance;
The progress of production expansion falls short of expectations: some of the company's production capacity is still insufficient. If the expansion falls short of expectations, it will affect the company's external sales volume; there is a risk of macroeconomic fluctuations.