Incident: The company released its 2023 annual report. In 2023, it achieved operating income of 50.457 billion yuan, a year-on-year increase of 8.66%, and realized net profit of 1,331 billion yuan, a year-on-year decrease of 44.16%, after deducting net profit of non-return to mother of 1,285 billion yuan, a year-on-year decrease of 35.32%; it plans to distribute a cash dividend of 1.0 yuan (tax included) for every 10 shares to all shareholders.
2023Q4 achieved operating income of 21.138 billion yuan, up 4.26% year on year, and realized net profit of 70 million yuan, up 277.61% year on year and 644.38% month on month.
The sales and order scale of large megawatt products continues to rise, and the profit of the complete machine business is still under pressure. In 2023, the company achieved an external sales unit capacity of 13772.29MW, which is basically the same as in 2022. As the process of large-scale wind turbines continues to accelerate, the scale of the company's large megawatt models is rapidly increasing. The 4MW (inclusive) -6MW unit is still the company's main model, with a sales capacity of 7482.70MW; the sales capacity of 6MW and above units increased 29.36% year-on-year to 6146.59 MW. As of the end of 2023, the company's total order volume reached 30401.12 MW, an increase of 12.13% over the previous year; the total number of external orders was 29783.72 MW, of which overseas orders were 4677.47 MW; of external orders, the on-hand orders of 4MW (inclusive) -6MW, 6MW and above were 10411.49 MW and 9461.05 MW, respectively. In terms of profit, competition in the industry intensified further in 2023 (according to the company's statistics, the average monthly public bid price of wind power suppliers in the entire market dropped from 1,755 yuan/kW in January 23 to 1,555 yuan/kW in December 23), and the gross margin of the company's fan and parts sales business increased 0.18 pcts year-on-year to 6.41%, which is still at a low level.
The wind power service+wind farm investment business went hand in hand, providing support for the full year's results. 1) The company's post-service business has covered the entire life cycle value chain of wind farms, and the scale of the wind power service business has further expanded. In 2023, the company's domestic and foreign after-sales service business project capacity was nearly 31 GW, an increase of 11% over the previous year; it achieved wind power service revenue of 5.241 billion yuan, of which post-service revenue was 3,027 billion yuan, an increase of 22.91% over the previous year. 2) The scale of wind power asset management increased steadily. At the end of 2023, the company's cumulative global equity grid installed capacity was 7289.04 MW, and the average power generation utilization time of domestic units was 2,441 hours, 216 hours higher than the national average, and achieved power generation revenue of 6.431 billion yuan. In 2023, the company transferred the equity grid capacity of 822.34 MW, and received investment income of 1,724 million yuan. At the end of 2023, the company's equity wind farm capacity under construction reached 2349.89 MW. The wind farm investment income under rolling development model will continue to support the company's performance.
Maintaining a “buy” rating: Affected by the fact that the tender price of the fan is still low, the company's profitability continues to be under pressure. We lowered the 24-25 year profit forecast and introduced a 26-year profit forecast. The company is expected to achieve net profit of 15.53/18.06/2.024 billion yuan (59% down/58% /increase) in 24-26, corresponding EPS of 0.37/0.43/0.48 yuan. The current A/H stock price is 20/7 times PE in 24, respectively. The company's fan quality and after-sales service capabilities remain industry-leading, and order volume is also expected to steadily increase the company's market share and maintain the company's A/H share “buy” rating.
Risk warning: supply chain price fluctuation risk; fan bidding price lower than expected; risk of industry policy changes.