The company is mainly engaged in the clean energy power generation business, and has continued to make efforts in terms of sea breezes in recent years. The company was founded in 1998 and is a listed company platform for Fujian Investors to position the electricity business. Over the years, it has been deeply involved in the field of electricity, and has been deployed in various fields such as wind power, photovoltaics, and biomass. As of 2023Q3, the company held 957,300 kilowatts of grid-connected installed capacity, and 61.13/29.6/2/30,000 kilowatts of landwind/seabreeze/photovoltaic/biomass respectively. The company continued to position itself as a clean energy power generation platform.
The industry currently has two misunderstandings about Haifeng and Fujian Haifeng: 1) The first is that Haifeng is concerned about the risk of electricity price discounts due to market-based transactions and the risk of wind abandonment due to consumption issues; 2) the second is the risk of significant discounts due to the competition mechanism of Fujian Haifeng in the previous two years. However, we believe that essentially, sea breezes are mainly distributed in coastal areas, and strong demand for electricity ensures normal consumption of electricity. There is some support for the fundamentals of ocean breezes in Fujian, whether in terms of electricity prices or electricity volume. At the same time, Haifeng is still in a relatively early stage of development. There is still a need for continuous exploration of how to rationally formulate a project distribution system. Fujian Haifeng Electric Distribution Prices may return to normal levels, and the project approval process may be further accelerated.
Fujian has excellent resources, a high development ceiling, and a high level of project profitability in the context of declining costs. Judging from the specific policies specified in the “14th Five-Year Plan” of Fujian Province's special energy development plan, the province's electricity plan reached 85 million kilowatts in '25, the target for wind power was 9 million kilowatts, and an additional 4.1 million kilowatts were added. In terms of sea breeze, the new development scale was 10GW+. Currently, the share of scenery in Fujian's energy structure is lower than the national level, and there is an urgent need to speed up the landscape. At the same time, against the backdrop of declining wind power costs, the construction process and revenue level of the project will improve.
Provincial enterprises have strong competitive advantages and are compatible with larger future project growth space. We have established an evaluation system for local operators. First, good local resources determine whether there is plenty of room for development. Second, the quality of the competitive landscape determines whether the company has the advantage of the project. Under the two-dimensional screening criteria of local operators, and relying on Fujian's high-quality ocean breeze, the company, as a provincial enterprise, will receive a certain amount of resource preference from the government in terms of seabreeze allocation; at the same time, relying on the Group's help, it will continue to make efforts to promote sea breeze in the future to create a benchmark image for local sea breeze operations.
The Group's resource injection is compounded by policy preferences, and subsequent performance is flexible. On the one hand, the Haidian Phase III and Yongtai Savings Projects are expected to be injected one after another in the next two years. Previously, the company announced that it would start the project injection process as soon as the compliance procedures were met. Furthermore, the Fortune Investment Group is highly committed to social responsibility and is expected to receive preferential government resources when constructing livelihood projects such as railways. As the Group's main platform for listed electricity companies, China Fujian Energy is expected to receive more resource support.
Investment advice: The company has a strong location advantage. Relying on good wind resource conditions and the support of the parent company's background, the company has broad room for subsequent growth. At the same time, the company is expected to inject assets into group projects in the future, further increasing the company's performance flexibility. Without considering asset injection for the time being, the company is expected to achieve operating income of 17.91/19.32/2,193 billion yuan in 23-25, corresponding growth rates of 0%/7.9%/13.5%, respectively; it is expected to achieve net profit to mother of 737/8.16/875 million yuan in 23-25, corresponding growth rates of 1.0%/10.7%/7.3%, respectively. Referring to the 24-year PE average value of comparable companies, the 24-year PE average is 13x. According to the 24-year forecast net profit of 816 million yuan, the target market value for 24 is 10.9 billion yuan, the target price is 5.8 yuan, and the space is 31%.
The first coverage gives a “strong” rating.
Risk warning: Project approval falls short of expectations, asset injection falls short of expectations, natural resource risk, electricity prices and other risks.