The company released the 2023 annual report and the 2024 quarterly report. The performance changed by +21.78%/-44.92%, respectively. The competitiveness of the company's products was enhanced, the market share was further increased to 9.3%, and the overseas market business scale expanded rapidly; maintaining an increase in holdings rating.
Key points to support ratings
Profit for the first quarter of 2023/2024 changed +21.78%/-44.92% year on year, respectively: the company released the 2023 annual report and achieved revenue of 14.939 billion yuan, up 21.21% year on year; realized net profit of 2.07 billion yuan, up 21.78% year on year; realized deducted non-net profit of 1,623 billion yuan, up 1.67% year on year. The company also disclosed its report for the first quarter of 2024. 2024Q1 achieved net profit of 266 million yuan to mother, a year-on-year decrease of 44.92%.
The fan market share increased further to 9.3% in 2023, and the 2024Q1 gross margin inflection point was evident: in 2023, the company sold 7.24 GW of fans, contributing 11.937 billion yuan in revenue, up 17.66% year on year, and the domestic market share further increased 0.2 percentage points to 9.3%. The company has entered the directory of well-known state-owned enterprises and local energy enterprise suppliers. With the successive breakthroughs of key major customers, the company's on-hand orders reached 15.89GW by the end of 2023, an increase of 71.78% over the end of 2022. Affected by fierce price competition in the industry, the gross margin of the company's fan business fell 6.54 percentage points year on year to 16.93% at the end of 2023, and the comprehensive gross profit margin of 2024Q1 company was 19.67%, up 5.30 percentage points from month to month, showing an inflection point in gross margin.
The company continues to invest in R&D, and the stand-alone capacity of the onshore fan has reached 15MW: the company continued to invest in R&D in 2023, and the R&D cost rate reached a high level of 5.83% in 2023. R&D investment supports the company's continuous progress in product development. By the end of 2023, the company's onshore fans had been deployed to 15MW, and offshore fans had formed a full range of 8.5MW-16MW products.
New breakthroughs have been made in overseas markets, and overseas business is expected to expand further: in 2023, the company achieved overseas revenue of 310 million yuan, an increase of 38,836.31% over the previous year, and gross margin reached 22.07%, which is 5.25 percentage points higher than the gross margin of domestic business. The company is actively expanding overseas business while building a “Chinese+local” overseas team. As of 2023, the overseas marketing team has exceeded 200 people, laying the foundation for the company to further enhance its overseas popularity, brand influence, and rapidly expand overseas business.
valuations
Under the current share capital, combined with the industry's relatively fierce price competition and the company's annual report, we adjusted the company's 2024-2026 earnings forecast to 1.89/2.13/2.42 yuan (the original 2024-2026 forecast was 1.98/2.46/- yuan), corresponding to a price-earnings ratio of 14.8/13.1/11.5 times; maintaining an increase rating.
The main risks faced by ratings
Risk of international trade friction; risk of demand growth falling short of expectations; risk of price competition exceeding expectations; risk of exchange rate changes exceeding expectations; risk of technological change.