Brief performance review

On April 22, the company disclosed its annual report. In 2023, the company achieved revenue of 2,403 billion yuan, a year-on-year increase of 30.5%; realized net profit to mother of 803 million yuan, an increase of 37.9% over the previous year. Among them, Q4 achieved revenue of 574 million yuan, an increase of 0.66% year on year, and realized net profit of 154 million yuan, a year-on-year decrease of 0.97%.

Management analysis

Electricity generation revenue grew steadily, and the share of market-based electricity transactions declined: the new energy power generation business achieved revenue of 2,284 billion yuan, an increase of 30.44% year on year; power generation capacity was 5.104 billion kilowatt-hours, up 35.75% year on year; and the weighted average feed-in electricity price was 0.5236 yuan/kWh. The company participated in market-based electricity transactions of 2.62 billion kilowatt-hours, accounting for 52.87% of feed-in electricity, a year-on-year decrease of 4.11 pcts.

The proposed wind power project increased by 188.9% year on year: in 2023, the company sold 150 MW wind power and photovoltaic projects, achieving an investment income of 706.27 million yuan. By the end of 2023, the company's installed capacity of new energy generation connected to the grid was 2.03GW, an increase of 5.5% over the previous year, including 1.85 GW of wind power, 173 MW of photovoltaics, and 6 MW of smart microgrids. The wind power project under construction and to be built was 1.82 GW, an increase of 188.9% over the previous year, and the energy storage project was 150 MW/300 MWh.

It is proposed to lay out the field of energy storage manufacturing to give full play to upstream and downstream synergy: According to the announcement, Jixi Zeyuan Energy Storage Equipment Technology Co., Ltd., a second-level wholly-owned subsidiary of the company, plans to invest in the construction of an energy storage battery manufacturing park project (Phase I), mainly for the integrated production of energy storage PACs and energy storage systems, with a total investment of 1.53 billion yuan. Judging from the operating model, the company is mainly responsible for investing in the fixed asset portion of the construction plant. After completion, the strategic partner plans to obtain the right to use the plant in a leasing model, and the latter will appoint its professionals to operate and manage it. This move is expected to strengthen cooperation between the company and upstream and downstream, and achieve complementary advantages, mutual benefit and win-win situation.

Profit Forecasts, Valuations, and Ratings

According to the company's annual report, the company's 2024-2025E net profit was fine-tuned to 1,009 billion yuan and 1,301 billion yuan. The net profit returned to mother is estimated to be 1,693 billion yuan in 2026, corresponding to PE of 8, 6, and 5 times, respectively, maintaining the “buy” rating.

Risk warning

The installed capacity of new energy fell short of expectations; increased competition exceeded expectations.