Incident: The company released its 2023 annual report & 2024 quarterly report, achieving revenue of 10.1 billion yuan, a year-on-year decrease of 7.4%, and a net profit of 9.1 billion yuan, +32.9% year-on-year; 24Q1 achieved revenue of 2.41 billion yuan, a year-on-year decrease of 11.1%, and realized net profit of 190 million yuan, a year-on-year decrease of 39.6%.
Fuel costs have declined, and the profitability of the clean energy business has been restored. In 2023, the company achieved a gross profit margin of 21.75%, a year-on-year increase of 6.6pp, a net profit margin of 9.49%, a year-on-year increase of 3.35pp; among them, the electricity sales business achieved revenue of 5.955 billion yuan, a year-on-year decrease of 1.4%, a gross profit margin of 23.98%, an increase of 8.89pp, and the steam sales business achieved revenue of 3.34 billion yuan, a year-on-year decrease of 17.2%, and a year-on-year increase of 4.17pp. 24Q1 achieved a gross profit margin of 22.81%, an increase of 6.03pp over the previous year, a net profit margin of 8.63%, and a year-on-year decline of 2.89pp.
Optimize the asset structure and increase the share of renewable energy. By the end of the reporting period, the total installed capacity of the company's grid-connected operation was 3,595 MW. During the reporting period, the company transferred shares in several fossil energy power generation projects, with a total scale of about 800 MW, and the company's coal-fired engine installed capacity dropped from 75.1% to 56.6%; in addition, the company launched the “Xinyangguang” household photovoltaic business, which had 1,609 connected users and delivered 7,203 users. The distributed industrial and commercial photovoltaic business completed 905 MW, and the company's asset structure was further optimized, and its comprehensive strength improved significantly.
Continue to extend to the energy application side to create an “optical storage and charging” integrated energy replenishment business. In terms of charging, during the reporting period, the company and Huawei Digital Energy reached all-round cooperation on the construction of a liquid-cooled overcharging network. The company launched a model site for the GCL Optical Storage and Overcharging Integrated Energy Station. Construction of the Suzhou Yangcheng E-sports Hall overcharging station began at the end of 2023 and was officially put into operation recently; in terms of power exchange business, as of the end of the reporting period, the company was operating a total of 69 power exchange stations, including 53 passenger stations and 16 commercial stations. According to data released by the China Association of Automobile Manufacturers, production and sales of new energy vehicles in 2023 were 9.59 million units and 9.5 million units respectively, up 35.8% and 37.9%, respectively. The rapid growth of new energy vehicles will further drive demand for charging stations and charging stations.
Profit forecasting and investment advice. It is estimated that in 2024-2026, the company's net profit to mother will be 1.26 billion yuan, 1.62 billion yuan, and 1.95 billion yuan, respectively, and the corresponding dynamic PE will be 12.1 times, 9.4 times, and 7.8 times, respectively. Considering that the company relies on GCL Group and has industrial synergy effects, we gave the company 17 and 25 times PE for the 2024 comprehensive energy business and power exchange business, respectively, corresponding to a target price of 13.66 yuan, maintaining a “buy” rating.
Risk warning: Risks such as station ratios not meeting standards, falling short of expectations in project commissioning, and large fluctuations in raw material prices.