Introduction to this report:

The company's revenue and net profit to mother rose year-on-year in the first quarter of 2024, mainly due to a recovery in the park's main business performance in development and operation; the “two wings” continued to gain strength, and the PV layout and industrial investment progressed steadily.

Key points of investment:

The company released its quarterly report for 2024. Both revenue and net profit to mother achieved positive year-on-year growth. The performance was in line with expectations, and maintained an increase in holdings rating. In the first quarter of 2024, the company achieved operating income of 1.03 billion yuan, a year-on-year increase of 11.1%, net profit of 4.7 billion yuan, a year-on-year increase of 13.1%, maintained EPS of 0.92 yuan, 0.99 yuan, and 1.06 yuan from 2024 to 2026, maintained a target price of 11.55 yuan, and maintained an increase in holdings rating.

The different stages of the park development project have led to an increase in short-term gross margin, which is at an absolute high level.

The company's gross margin for the first quarter of 2024 was 71.4%, up 4.4 pcts year on year, up 20.6 pcts from the full year of 2023. It is estimated that the company's park business is at different stages, and gross margin fluctuates due to the impact of settlement time.

It is planned to acquire China Gas's 33.5 MW photovoltaic power generation project for 150 million yuan to help expand the scale of the company's distributed photovoltaic assets and installed capacity. In April 2024, the company plans to acquire all of the shares of the nine target companies held by the nine subsidiaries of China Gas Indirect Holdings through its indirect holding subsidiary, Sino-Singapore China, to obtain their photovoltaic power generation projects. The acquisition will accelerate the scale expansion of distributed photovoltaics, achieve the goal of 2 GW by 2025 as soon as possible, and push the business into a period of performance harvest.

Industrial investment empowers the park's main business of operation and development, and continues to focus on fields such as semiconductors, robotics, and biomedicine. Starting in 2024, the company plans to add 4 additional investment funds, with a cumulative pledge of no more than 340 million yuan. The investment direction includes the semiconductor industry chain, robotics industry chain, technology and medical care, etc., which will further strengthen the main business of park development and operation and bring about business collaboration.

Risk warning: The development progress of the park is lower than expected, and the development of green power and industrial investment is lower than expected