Incident: The company released its 2023 annual report and 2024 quarterly report. For the full year of 2023, the company achieved operating income of 27.859 billion yuan, -9.39% year-on-year; net profit to mother was 372 million yuan, -89.19% year-on-year. 24Q1 achieved operating income of 5,075 billion yuan, +84.60% year over month, and -26.46% month on month; net profit to mother was 304 million yuan, +233.83% year over year, and +135.56% month on month. The performance was in line with expectations.
Fan prices continued to fall, putting pressure on gross margins in '23. In 2023, the company achieved overseas sales of fans of 9.69 GW, +32.66% year on year; corresponding sales of fans and related accessories reached 23.517 billion yuan, +3.11% year-on-year; sales gross margin of fans and related accessories was 6.35%, -11.42 pct year on year. Looking at the submodel model, the revenue growth rate for models above 6.XMW was rapid, achieving revenue of 12.247 billion yuan, +37.02% over the same period, accounting for a continuous increase in fan sales, +17.79pct compared to the previous year. Fan prices continued to decline in 23 years, and the gross margin of the company's fan sales business was under pressure.
There was a year-on-year increase in flashlight stations, and “rolling development” was profitable. During the reporting period, the company achieved a total operating revenue of 1,499 billion yuan, +12.24% year on year; gross margin of power plant operation business was 63.00%, +3.12 pct year on year; and the average number of power generation hours in operation of the company was 1,568 hours. By the end of 2023, the installed capacity of the company's operating new energy power plants was 2.56 GW, +70.47% year over year; the installed capacity under construction was 3.30 GW, -3.49% year over year. During the reporting period, the new energy power plants operated by the company achieved a total power generation capacity of 4,016 billion kilowatt-hours, an increase of 40.46% over the previous year.
The development of offshore wind power is accelerating, and the company's offshore fan technology is leading. In 2023, the company released the MySE22MW, the world's largest offshore wind turbine, and launched the MySE18.X-20mW offshore wind turbine with the largest stand-alone capacity and the largest fan diameter in the world. The stand-alone power of the company's offshore fan models has iterated to 8MW, 11MW, 12MW, 16MW and higher 18MW and 22MW models. According to our analysis, the Seabreeze installation project is expected to reach 10GW+ in '24, and the Seabreeze tender is expected to exceed 15GW in '24. With the rapid development of offshore wind power, the company is expected to benefit.
Investment advice: The company's net profit for 24-26 is estimated to be 25.73/31.23/37.21 billion yuan, +590.7%/21.4%/19.1% year-on-year, and EPS of 1.13/1.37/1.64 yuan respectively, maintaining the “buy” rating.
Risk warning: wind power installation falls short of expectations, wind farm construction falls short of expectations, risk of fluctuations in raw material prices