A leading global clean energy operator, it has maintained its position as the world's largest wind power operator since 2015.
The controlling shareholder of the company is National Energy Investment Group. As of the 23rd annual report, the direct shareholding ratio reached 54.9%.
As of the end of 23, the company held 35.59 million kilowatts of installed capacity, of which other renewable energy sources such as wind power, thermal power, and photovoltaics reached 2775/188/5.96 million kilowatts, respectively. The company generated 76.2 billion kilowatt-hours of electricity for the full year of '23, YOY +7.92%. In '23, the company achieved revenue of 37.64 billion yuan, YOY -5.6%; net profit to mother of 6.25 billion yuan, YOY +22.3%. The company accrued impairment of about 2.1 billion yuan for 23 years (2 billion yuan for 22 years), including 1.2 billion yuan of fixed asset impairment (860 million yuan depreciation for large and small projects), 650 million yuan of intangible asset impairment (for large generation and small franchises), and 250 million yuan of impairment of projects under construction.
With abundant project reserves+subsidy repayment, self-built installations are expected to accelerate. The National Energy Group's “14th Five-Year Plan” new energy installation target is 70-80GW. As the Group's main new energy platform, the installed capacity can be expected to increase.
(1) The total number of developable indicators obtained by the company in 21-23 reached 59.5 GW, and the project reserves are sufficient; (2) the company's national reimbursement of 6.42 billion yuan in 2023 (20.77 billion yuan recovered in '22), and the company's new energy installation construction target is expected to be gradually realized as subsidies return. (3) The company proposed a 24-year plan to start 10 GW of new energy projects, striving to put into operation 7.5 GW (4.5 GW added in 23), and the pace of new energy project construction is accelerating.
As business integration progresses, the value of green electricity is expected to become clear. When the company first went public in 2022, it promised to promote the Group's continuous wind power asset injection and thermal power business integration through asset restructuring and other forms within three years (22-24). 1. According to the restructuring transaction report, as of 21H1 Group, more than 20 GW of wind power assets are to be injected, including about 11 GW of fans from the Group New Energy Company (formerly a wind power asset under Shenhua Group. Shenhua Group began construction and operation of landscape projects in 2005, mainly distributed in the Sanbei region, with high-quality project endowments).
2. The company's thermal power assets total 1.88 million kilowatts. It is estimated that the net profit of Thermal Power in '23 was about 180 million yuan (13/120 million yuan in 21/22, respectively). The operation was steady and the volume was small, and the subsequent integration had little impact on the company.
We believe that as a new energy platform for the National Energy Group, the company's green value is expected to gradually become prominent as market support mechanisms such as green power are gradually improved.
As the renovation of old units progresses, the yield of old projects is expected to increase. On the one hand, the transformation of old units is expected to increase the utilization of high-quality wind resources in existing projects and improve the yield level of the project. At the same time, it is also expected to expand the installed capacity scale through “capacity expansion and transformation”. The capacity of the company's surviving units in 2010 and before reached 6.56 million kilowatts. Assuming a 70% technical improvement rate and 2 times capacity expansion, the potential increase in the company's installed capacity exceeds 9 million kilowatts; in the context of the smooth progress of the policy, the existing units are renewed, and wind power faucets are expected to enter a long-term virtuous cycle development channel.
Profit forecasting and valuation. We expect the company's 24-26 EPS to be 0.90/1.03/1.19 yuan. Comparable to the 24-year average PE of the company, 14 times. As a green electricity leader, the company also has asset injection expectations. A valuation premium can be given to the company. The company can be given 22-24 times PE in 24 years, corresponding to a reasonable value range of 19.8-21.6 yuan. The first coverage is superior to the market rating.
Risk warning. The installed capacity growth rate was lower than expected, asset injection was progressing slowly, and depreciation due to “big generation to small” calculation, etc.