Brief performance review
On April 29, 2024, the company released its annual report and quarterly report. In 2023, it achieved revenue of 14.939 billion yuan, an increase of 21.2% over the previous year; net profit to mother was 2,007 billion yuan, an increase of 21.78% over the previous year. 1Q24 achieved revenue of 1,728 billion yuan, up 10.5% year on year; net profit to mother of 266 million yuan, down 44.9% year on year, gross profit margin 19.7%, down 9.33 pct year on year, and fixed 5.40 pct month on month.
Management analysis
New orders reached a new high, and the ocean breeze layout is ready to be released: the company achieved revenue of 11.937 billion yuan in 2023, up 17.66% year on year, gross margin was 15.5%, down 7.80 pct year on year, mainly due to increased downstream competition and lower tender prices. By the end of 2023, the company's current orders were 15.89 GW, and new orders in 2023 were 14.1 GW, a record high. In October 2023, the company released 13MW/16MW offshore fan products to achieve a full range of 8.5MW-16MW offshore fan reserves. With the acceleration of seabreeze projects in various provinces and cities at the end of the 14th Five-Year Plan period, the company's ocean wind products are expected to increase in volume.
Overseas business has grown significantly, and the revenue structure is expected to be optimized: the company's international business revenue is 310 million yuan in 2023, completing a breakthrough from 0 to 1, and achieving wind power equipment exports to Central Asia and South Asia. The gross margin of the international business in 2023 was 22.1%, which is 5.25pct higher than the gross margin of the domestic business, and the profit advantage is obvious. By the end of 2023, the company has formed an overseas marketing team of more than 200 people, which basically covers the world's major wind power markets. Overseas development is expected to accelerate. As the share of international business revenue increases, the company's revenue structure is expected to improve.
The wind farm under construction has sufficient reserves and is expected to continue to contribute to profits: in 2023, the company's wind farm is 634 million yuan, with a gross margin of 36.0%, which is 20.55pct higher than the fan manufacturing sector. The company transferred its own wind farm in 2023 to obtain an investment income of at least 1.08 billion yuan, accounting for 54% of the net profit to the mother. The hematopoietic effect is obvious. By the end of 2023, the company's stock of wind farms was 247.6 MW, down 164 MW from the end of June, and the capacity of the wind farm under construction was 2.4 GW, up 1.7 GW from the end of June. The company has sufficient capacity reserves for wind farms under construction, and it is expected that it will continue to contribute to profits by adhering to the implementation of the “rolling development” strategy.
Profit Forecasts, Valuations, and Ratings
According to the company's annual report and quarterly report, the 2024-2025 net profit forecast was fine-adjusted to 23.60 (+1.6%) and 29.57 (-3.0%) billion yuan. The estimated net profit for 2026 is 3.345 billion yuan, corresponding to PE of 15, 12, and 11 times, maintaining the “buy” rating.
Risk warning
Wind power installations fall short of expectations; competition increases risk; raw material prices fluctuate.