2023 was the first year of batch delivery of overseas Haifeng projects. Q4 profits were pressured by factors other than its own, Daikin Heavy Industries released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved operating income of 4.325 billion yuan, yoy -15.3%; realized net profit of 425 million yuan, yoy -5.6%; of these, 2023Q4 achieved operating income of 992 million yuan, yoy -29.1%; realized net profit to mother of 0.17 million yuan, yoy -85.9%. 2024Q1 achieved operating income of 463 million yuan, yoy -45.8%; net profit to mother of 53 million yuan, yoy -29.1%. The decline in the company's net profit in 2023 was mainly due to Q4's negotiations with overseas owners to bear additional costs for some projects, reducing net profit by about 91 million. This was an unexpected situation. Considering the slow progress of overseas and domestic sea breeze projects, we lowered its profit forecast for 2024-2025. The company's net profit for 2024-2025 is estimated to be 6.51 to 860 million yuan (original 947/1,362 million yuan), adding a profit forecast of 1,024 million yuan for 2026, and EPS of 1.02/1.35/1.61 yuan, corresponding to the current share price PE of 20.6/15.6/13.1 times. Considering the company's abundant overseas orders and the upcoming launch of the Sea Breeze project, it maintains a “buy” rating.
It is the only supplier in Asia Pacific to deliver marine products to Europe. The first-mover advantage stabilizes the company's total shipment of 508,000 tons in 2023, of which European marine goods were close to 100,000 tons, and the share of annual overseas revenue rose to 40%. 2023 was the first year to achieve large-scale export deliveries. The total number of orders signed in 2023 increased by more than 50% compared to 2022. It is expected to be delivered one after another in 2024-2026, with sufficient reserve orders. The total demand for overseas offshore projects currently being participated in exceeds 3 million tons, steadily advancing the global offshore strategy.
Export offshore production capacity continues to expand, and shipping vessels and power generation have become new growth points. Currently, overseas product production is concentrated at the Penglai base. The company is actively building a global gigafactory with mass production capacity for all types of large-scale wind power, oil and gas offshore. The Tangshan Caofeidian base is expected to be put into operation in March 2025. At the same time, the company is also setting up an offshore engineering base in Panjin, which focuses on special transport vessels, and will successively deliver two special carriers for offshore wind power equipment in 2025. In addition, the Fuxin Zhangwu Xiliujiazi 250MW wind power project has been connected to the grid, and the Tangshan Caofeidian Shilihai 250MW Yuguang complementary photovoltaic project aims to be completed within this year.
Risk warning: Overseas policy changes, offshore wind power project construction falls short of expectations, raw material prices fluctuate, industry competition heightens the risk, the company's overseas bid falls short of expectations, and the company's production capacity release falls short of expectations.