Introduction to this report:

The company's high increase in new energy power generation is driving explosive growth in performance, and the 2024E annual performance is expected to continue to increase.

Key points of investment:

Maintaining the “Overweight” rating: Maintaining the 2024/2025/2026 EPS to 1.09/1.26/1.58 yuan. Maintain the target price of 16.52 yuan and maintain the “Overweight” rating.

Incident: The company's 1Q24 revenue was 970 million yuan, +49.6% year over year; net profit to mother was 360 million yuan, +101% year over year, in line with the previous performance forecast range.

The high increase in electricity from new energy sources is driving explosive growth in performance. The company's high performance in 1Q24 was mainly driven by the new energy business. The net profit of the company's new energy sector was 320 million yuan during the same period. 1Q24's new energy sales volume was 1.39 billion kilowatt-hours, +133% year-on-year. We believe that the company's high performance in 1Q24 confirms that the profitability of the company's new wind power projects remains at a high level (we believe that the estimated yield of the company's new wind power projects is conservative; in fact, key parameters such as grid electricity prices, utilization hours, and construction costs are expected to be superior to the estimated estimated values of the project), and the company's annual performance is expected to continue to rise high. The net profit of the natural gas sector of 1Q24 Company was -0.24 million yuan, a year-on-year increase of 0.13 million yuan, mainly due to increased costs and expenses after the successive upgrading of feeder pipelines. 1Q24 sells 76 million square meters of natural gas, +105% year-on-year, and continues to explore the downstream market.

There are plenty of reserve projects, and installed capacity is expected to continue to grow. We expect the company's sufficient wind power project reserves to lay the foundation for continuous high growth: 1) the first phase of the Admiralty Wind Farm will be connected to the grid in 1Q24; 2) the second phase of the Admiralty Wind Farm project has completed bidding work for the fan equipment and main engineering construction; 3) the 670,000 kilowatt wind power expansion project will carry out preliminary work in an orderly manner. Furthermore, as of the end of 1Q24, the company had signed a number of “substitute cultivation agreements” with the controlling shareholder and its subsidiaries with a total rated capacity of 1.05 million kilowatts, and priority injection into the company after the project satisfies good profit and standardized operating conditions.

Risk warning: Electricity demand falls short of expectations, salt and nitrate business operations fall short of expectations, etc.