Core views

The company released the 2023 annual report and the 2024 quarterly report. The full year of 2023 achieved revenue of about 14.939 billion yuan, an increase of 21.2% over the previous year, and realized net profit of about 2.07 billion yuan, an increase of 21.8% over the previous year. In Q1 2024, we achieved revenue of 1,728 billion yuan in a single quarter, up 10.5% year on year and down 76.8% month on month; realized net profit to mother of 266 million yuan, down 44.9% year on year. Shipments of large megawatt fans increased significantly in '23, and gross margin rebounded markedly in Q1 in '24. In 2023, the company added 14.1 GW of new orders, a record high, and achieved explosive growth; in 2023, the company's external sales capacity was 7.24 GW; by the end of 2023, the company's on-hand orders were 15.89 GW.

occurrences

The company released the 2023 annual report and the 2024 quarterly report. The full year of 2023 achieved revenue of about 14.939 billion yuan, an increase of 21.2% over the previous year; realized net profit of about 2.07 billion yuan, an increase of 21.8% over the previous year, and net profit after deducting the net profit of 1,623 billion yuan, an increase of 1.6% over the previous year.

Looking at the Q4 single quarter, revenue was 7.449 billion yuan, up 24.6% year on year and 108.3% month on month; net profit to mother was 976 million yuan, up 61.4% year on year, up 356.6% month on month; net profit after deduction was 870 million yuan, up 40.0% year on year, up 1182.4% month on month.

The Q1 quarter of 2024 achieved operating income of 1,728 billion yuan, up 10.5% year on year and down 76.8% month on month; realized net profit of 266 million yuan, down 44.9% year on year and 72.8% month on month; realized net profit after deduction of 237 million yuan, down 41.7% year on year and 72.8% month on month.

Brief review

Shipments of large megawatt fans increased significantly in '23, and gross margin rebounded markedly in Q1 in '24. In 2023, the company achieved revenue of about 14.939 billion yuan, with a comprehensive gross margin of 16.93%, a year-on-year decrease of 6.54 pcts, of which fan business revenue was 11.937 billion yuan, up 17.7% year on year; gross profit margin was 15.5%, down 7.8 pct year on year, mainly due to increased industry competition. However, compared with peers, the company's gross margin was still in the first tier, with significant cost advantages.

The Q1 company achieved revenue of 1,728 billion yuan in 2014, with a comprehensive gross margin of 19.67%, a year-on-year decrease of 9.33 pcts, and a month-on-month increase of 5.3 pcts. Q1 gross margin showed a significant recovery from month to month.

In 2023, the company added 14.1 GW of new orders, a record high, and achieved explosive growth; in 2023, the company's external sales capacity was 7.24 GW; by the end of 2023, the company's on-hand orders were 15.89 GW.

The fan transfer business continues to boost the company's profits. The company's net investment income for the full year of 2023 was 1,798 billion yuan, and the company transferred 609.9 MW of projects in 2023; by the end of 2023, the company had 247.6 MW of wind farms and 2.4 GW of wind farms under construction.

The four-year rate for the full year of 2023 was 15.4%, and the sales and management expenses increased by 1.1 and 0.3 pct, respectively. This was mainly due to the company's development of overseas and overseas markets, the increase in sales staff and related expenses, and the expansion of the company's business scale. In 2024, the Q1 four-fee ratio was 25.3%, up 14.6pct from month to month. The year-on-year change was small but the month-on-month change was large, mainly due to the month-on-month decline in Q1 revenue but the rigidity of expenses remained rigid.

In 2023, the company's onshore wind turbine R&D focus has reached 15 MW, and the development of an onshore 15.5 MW double feed generator has been completed, establishing the position of an oversized megawatt model in the onshore wind power market; the company's offshore wind turbines have been put into development, forming a full range of 8.5MW-16MW offshore fan products.

Profit forecast: The company is expected to achieve operating income of 181.6, 249.8, and 30.45 billion yuan in 2024, 2025, and 2026, respectively, and achieve net profit of 23.3 billion yuan, 27.3, and 3.25 billion yuan, corresponding PE of 14.7, 12.5 times, and 10.5 times, respectively, maintaining the “increase in holdings” rating.

Risk warning

1. Risk of fluctuations in the international macroeconomic situation. There is uncertainty about the operation of the global economy, and the company faces certain challenges in developing overseas business.

2. Increased competition in the industry. The fan industry has relatively overcapacity, and competition in the industry is fierce. Fan prices have continued to drop sharply since 2021. If industry competition intensifies further, it may damage the company's profits.

3. Risk of component price fluctuations. The company procures castings, spindles, gearboxes, etc. from upstream raw materials. Fluctuating prices of upstream raw materials will affect the company's profit level.

4. The risk of increased competition in the offshore fan business. Currently, there are relatively few participants in the sea wind fan market. As more competitors enter, competition in the sea wind fan industry is likely to intensify.