Key points of investment
Revenue grew steadily, and profits were under pressure in the short term
In 2023, the company achieved operating income of 50.457 billion yuan, an increase of 8.66% over the previous year; net profit to mother was 1,331 billion yuan, a year-on-year decrease of 44.16%. With 2023Q4, the company achieved operating income of 21.138 billion yuan, up 4.26% year on year; net profit to mother of 70 million yuan, up 277.61% year on year; gross profit margin of 16.53%, down 1.64 pct from month to month.
Wind turbines: The process of large-scale units continues to accelerate, and on-hand orders increased steadily. In 2023, the company achieved 13.77 GW of foreign fan sales, which is basically the same as in 2022. As the process of large-scale units in the wind power industry continues to accelerate, 4MW (inclusive) -6MW units became the company's main model, with a sales capacity of 7.48 GW, accounting for more than 50%; 6MW and above models had a sales capacity of 6.15 GW, accounting for 44.63% of sales capacity, up 29.36% year on year, accounting for 44.63% of sales capacity. The company's current orders continued to grow steadily. By the end of 2023, the total number of orders pending execution from outside the company was 20.71 GW, and the total number of external orders on hand was 29.78 GW, of which 4.68 GW was overseas orders; the company's internal orders were 0.62 GW. By the end of 2023, the company's current orders totaled 30.40 GW, a year-on-year increase of 12.13%.
Wind farm investment and development: Fast access to offshore project resources. Power plant transfer revenue increased dramatically. In 2023, the company achieved wind farm investment and development business revenue of 10.915 billion yuan, up 57.96% year on year; gross profit margin was 47.30%, down 18.09pct year on year; by the end of the fourth quarter of 2023, the company's cumulative global equity grid installed capacity was 7.29 GW, and the wind farm capacity under construction was 2.35 GW. In 2023, the average power generation utilization time of the company's domestic units was 2,441 hours, 216 hours higher than the national average. In 2023, the company transferred 822.34 MW of wind farm projects, with revenue of 1,721 billion yuan, an increase of 54.07% over the previous year.
Wind farm operation and maintenance services: Continued increase in wind power asset management. Operation and maintenance service revenue increased steadily. In 2023, the company achieved wind farm operation and maintenance service revenue of 5.241 billion yuan, a year-on-year decrease of 7.18%; the gross profit margin was 19.84%, a year-on-year decrease of 3.97 pcts. The company relies on the Digital Intelligence Center to reshape the application of asset management models for new energy projects, actively exploiting the advantages of power transactions and digital operation and maintenance to help improve asset operation efficiency and revenue levels steadily: by the end of 2023, the company's wind farm asset management service scale had reached 18.94 GW, of which the external wind farm asset management service scale was 11.59 GW, an increase of 2.21% over the previous year. In 2023, the company's post-service business project capacity in operation was close to 31 GW, an increase of 11% over the previous year. After implementation, service revenue was 3,027 billion yuan, an increase of 22.91% over the previous year.
Profit forecasting and valuation
The profit forecast was lowered and the “buy” rating was maintained. The company is a global fan leader, promoting investment in wind farm development to achieve stable cash flow. Considering the decline in fan prices, we lowered our profit forecast for 2024-2025 and added a profit forecast for 2026. The company's net profit for 2024-2026 is estimated to be RMB 2,188, 25.87 and RMB 3.198 billion, respectively (net profit of RMB 33.39 and RMB 4.426 billion before the reduction), corresponding EPS is 0.52, 0.61, and 0.76 yuan, respectively, and the corresponding PE is 15, 13, and 10 times, respectively.
Risk warning: wind power installed demand falls short of expectations; raw material prices fluctuate; risk of product price fluctuations.