Event: The company released its annual report for 2023 and the first quarter report for 2024. In 2023, the company achieved revenue of 26.485 billion yuan, up 11.23% year on year; net profit to mother was 7.181 billion yuan, up 0.94% year on year (after adjustment).
The company plans to distribute cash dividends of 0.078 yuan per share to all shareholders in '23, for a total cash dividend of 2,232 billion yuan, with a cash dividend ratio of about 31.09%. 24Q1 achieved revenue of 7.899 billion yuan, up 15.26% year on year; net profit to mother was 2,422 billion yuan, up 0.10% year on year (after adjustment).
The wind power and photovoltaic business continued to expand in 23 years, and revenue grew steadily. In '23, the company's grid-connected installed capacity reached 40.04 GW. Among them, wind power is 19.42 GW (3.49 GW added in 23) and photovoltaic power generation is 19.82 GW (9.54 GW added in 23). In the same period, the company completed 55.179 billion kilowatt-hours of power generation, an increase of 14.12% over the previous year.
Among them, wind power generation capacity was 38.956 billion kilowatt-hours, up 14.75% year on year; photovoltaic power generation capacity was 15.354 billion kilowatt-hours, up 14.23% year on year. The revenue from the wind power business in '23 was 18.569 billion yuan, up 9.97% year on year, and the gross profit margin was 56.94%, down 4.60 pcts year on year; the revenue from the photovoltaic power generation business was 7.412 billion yuan, up 13.42% year on year, and the gross profit margin was 53.20%, which was basically the same as year on year.
Revenue increased in 24Q1, and net profit to mother remained basically the same. 24Q1 achieved operating revenue of 7.899 billion yuan, an increase of 15.26% over the previous year; the main reasons: 1) the company's new grid-connected wind power and photovoltaic units increased, and feed-in electricity volume and revenue increased; 2) the company's wind power (land wind, sea wind) and photovoltaic project resources were better than in the same period last year. Net profit attributable to mother during the same period was 2,422 billion yuan, which was basically the same (up 0.10% year on year); the main reasons for this were: the number of new wind power and photovoltaic units put into operation by the company increased, trial operation revenue increased year on year, depreciation and operating costs increased year on year, and profit and loss attributable to minority shareholders increased.
Over 23 years, there have been plenty of projects under construction and approval to support the company's steady expansion in the future. By the end of '23, the company had 18.77GW of projects under construction, of which 5.86/12.41/0.5GW of wind power/photovoltaic/other power generation types were respectively. 26.50 GW of new approved/ registered projects, of which 7.24/14.93/2.60/1.73 GW of wind power/ photovoltaic/ other power generation types were respectively. There are plenty of projects under construction and approval, and the company is expected to achieve a steady increase in installed capacity and steady business expansion.
Profit forecast, valuation and rating: The company's Lüden installed equipment expanded rapidly, and depreciation and operating costs increased significantly year-on-year, which had a certain impact on the overall profit growth rate. We lowered the company's 24E-25E net profit to RMB 8992/10.378 billion yuan (previous value was RMB 103.85/12.765 billion yuan), and added the net profit forecast for 26 years to RMB 12.182 billion. The corresponding EPS for 24-26 years was 0.31/0.36/0.43 yuan, respectively, and the corresponding PE was 15/13/11 times. Considering that the company has sufficient approved capacity, strong room for future growth, and performance is expected to grow rapidly, we maintain a “buy” rating.
Risk warning: The sharp rise in raw material prices in the photovoltaic and wind power industries affects the company's profitability, and the progress of reducing offshore wind power costs falls short of expectations.