Maintain the increase in holdings. Maintain the forecast that EPS will increase by 12/ 14% to 0.21/0.24 yuan in 2024-2025, and EPS will increase 13% by 0.28 yuan in 2026. Maintain the target price of 3 yuan, corresponding to 14 times PE in 2024.
Net profit increased slightly better than expected by 2% in 2023, and both revenue and performance growth increased month-on-month in Q4. (1) Revenue of 406 billion yuan in 2023 increased 11% (Q1-Q4 increased 4/17/ -45/ 32%), of which engineering construction/investment and operation in the new energy sector increased 39/ 59% by 1157/3.7 billion yuan, respectively; net profit to mother of 8 billion yuan increased 2% (Q1-Q4 increased 18/-17/ -70/ 35%). (2) 2023 gross profit margin 12.64% (+0.22pct), expense ratio 8.45% (+0.14pct), net return to mother 1.97% (-0.17pct), ROE 7.88% (-0.60pct).
Operating cash flow increased 20% in 2023 compared to the previous year, and accounts receivable and impairment increased. (1) Net operating cash flow in 2023 was 9.5 billion yuan (7.9 billion yuan in the previous year), and Q1-Q4 was -155/18/-11/242 billion yuan (-143/5/-48/265 billion yuan in the previous year). In 2023, the payout ratio was 88% (92% the previous year), and the payout ratio was 85% (89% the previous year). (2) The total cash flow from operation+investment was 32 billion yuan (41.1 billion yuan in the previous year). (3) Accounts receivable of $78.2 billion (+7%), with a total impairment loss of $3.2 billion ($2.5 billion in the previous year).
Hydrogen energy focused on generating green hydrogen, etc., to seize the high ground in the industry, and new contracts for pumped energy storage increased 88%. (1) New contracts of 1.28 trillion yuan increased by 22% in 2023 (Q1-Q4 increased 22/21/83/ -3%), of which new energy/traditional energy engineering construction increased 26/ 8% to 42/16%; new pumped energy storage signed 124.9 billion yuan increased 88%; new landscape development indicators were added by 2010 million kilowatts; and on-hand orders increased by 36% to 2.48 trillion yuan.
(2) The 2024 plan is to sign a new 1.3 trillion yuan, with revenue of 428 billion yuan and an investment of 1605 billion yuan. (3) At the end of 2023, the installed capacity of new energy grid/traditional energy holdings increased by 91/2% to 951/209 million kilowatts. (4) Focus on green electricity to generate green hydrogen, etc., to seize the high ground of the industry. (5) It is proposed to increase not more than 14.85 billion yuan for wind and solar storage, etc.
Risk warning: macroeconomic policies have been tightened beyond expectations, infrastructure investment has fallen short of expectations, etc.