Introduction to this report:
By the end of 2023, the company's grid-connected installed capacity of 27.19 million kilowatts increased by 33%, of which 8.41 million kilowatts of wind power increased by 10%; 7.73 million kilowatts of solar energy increased by 190%. Net profit due to mother increased 13.6% in 2023, and increased 24.0% in a single quarter in Q4. Investment highlights:
Maintain an increase in holdings. Maintain the forecast that EPS of 0.82/0.91 yuan will increase by 9%/10% in 2024-2025, and the corresponding growth rate of EPS of 0.98 yuan in 2026 is 8%. Due to the overall valuation reduction in market-related sectors, the target price was lowered to 7.5 yuan, corresponding to 9 times PE in 2024.
Net profit due to mother increased 13.6% in 2023, in line with expectations, and increased 24.0% in Q4. In 2023, revenue of 608.4 billion yuan increased by 6.4% (Q1-Q4 increased by 3.6/8.0/6./ 7.2%). By business, engineering design of 55.6 billion yuan increased by 9.2%, and electricity investment of 24 billion yuan increased by 0.7%, of which 95 billion yuan in new energy increased 10.0%. Net profit attributable to mother of 13 billion yuan increased 13.6% (Q1-Q4 increased 8.7/13.3/7.8/ 24.0%), after deducting non-11.7 billion yuan, an increase of 13.2%.
Net operating cash flow decreased by 27.8% in 2023, and accounts receivable and impairment increased. (1) Net operating cash flow of 22.3 billion yuan in 2023 (30.8 billion yuan in 2022), of which Q1-Q4 was -330/ -63/34.2 billion yuan (-186/-38/44/48.8 billion yuan in 2022). The payout ratio is 102% in 2023 (99% in 2022), and the payout ratio is 97% (95% in 2022). (2) Total operating and investment cash flow - $58.7 billion (2022 - 14.8 billion yuan). (3) Accounts receivable of RMB 106.3 billion increased by 5.9%, with total impairment losses of RMB 6.69 billion (RMB 5.03 billion in 2022).
In 2023, new orders increased 13%, and solar installations increased 190%. (1) New signatures of 1.1 trillion yuan increased by 13% in 2023 (29% increase in the same period in '22), of which new foreign signings of 215.2 billion yuan increased by 12%, accounting for 19%. New orders in Q1-Q4 increased by 30/ -15/9/ 38% in a single quarter. New contracts of 331.1 billion yuan in Q1 in 2024 increased 3%. (2) By the end of 2023, the company's grid-connected installed capacity increased by 33%, of which 8.41 million kilowatts of wind power increased by 10%; 7.73 million kilowatts of solar power increased 190%; 6.85 million kilowatts of hydropower remained flat; 3.65 million kilowatts of thermal power increased 15%; and 550,000 kilowatts of independent energy storage increased by 1006%. Clean energy accounts for 84.6%. (3) According to an announcement on October 18, 2023, it is proposed to split the subsidiary Dengjian Renewable Energy and list it on the main board of the Shanghai Stock Exchange.
Risk warning: macroeconomic policies have been tightened beyond expectations, infrastructure investment has fallen short of expectations, etc.