The 2023 results increased slightly year over year, and 2024Q1 remained flat year over year. The company released its 2023 annual report, achieving revenue of 26.485 billion yuan (+11.2% YoY), net profit of 7.18 billion yuan (YoY +0.9%, -11.6% YoY in the first three quarters), and net profit of 7.01 billion yuan (-2.4% YoY) after deducting non-return to mother. The continued increase in performance was offset by the commissioning of new projects (+14.1% year-on-year power generation) to offset the negative effects of a 46.9% decline in trial operation revenue and investment income. 2024Q1 achieved revenue of 7.9 billion yuan (+15.3% year over year) and net profit to mother of 2.42 billion yuan (+0.1% year over year); the installed capacity was high but the performance remained flat, mainly due to depreciation and higher year-on-year increase in operating costs.

In 2023, 13.5 GW of installed capacity was added, generating 55.2 billion kilowatt-hours. In 2023, the company added 2.9, 0.6, and 9.5 GW of land wind, sea wind and photovoltaics respectively, and the total installed capacity has reached 40 GW.

In 2023, land wind, sea wind, and photovoltaic power generation were 264, 126, and 15.4 billion kilowatt-hours (+16.5%, +11.2%, and +14.2% year-on-year, respectively), and 2024Q1 were 75, 4.5, and 5.5 billion kilowatt-hours (+11.4%, +25.5%, +64.9%), respectively. The total power generation capacity was 17.7 billion kilowatt-hours (+28.7% year over year). Q1 The revenue growth rate is not as high as the electricity volume growth rate, and the pressure on electricity prices is expected to be strong.

With 19 GW of installed units under construction and over 25 GW of new nuclear preparations, a rolling development pattern has been completed. At the end of 2023, the company's wind power and photovoltaic projects were 5.9 and 12.4 GW, respectively, and 30.2% and 62.6% were under construction/operation respectively; 26.5 GW of nuclear preparation projects (7.2 GW for wind power and 14.9 GW for photovoltaics) were added during the year. The current electricity reform process is accelerating, and the successive implementation of the electricity price system is expected to solve the problem of energy consumption; with the continuous decline in component prices (component prices have dropped below 0.9 yuan/watt, PVInfoLink data), the profit model of green power operators is expected to be clear, and it is expected that installation will be implemented at an accelerated pace.

Profit forecasting and investment advice. The company's net profit from 2024 to 2026 is estimated to be 835, 94.2, and 10.50 billion yuan, respectively, and the PE corresponding to the latest closing price is 16.1, 14.3, and 12.8 times, respectively.

The company has plenty of reserve projects, and a rolling development pattern has been established. According to the share increase announcement, the controlling shareholder plans to increase their holdings by 300 to 500 million yuan, which shows confidence in development. Referring to the peer valuation level, the company was given a PE valuation of 18 times in 2024, corresponding to a reasonable value of 5.25 yuan/share, maintaining a “buy” rating.

Risk warning. Installed capacity growth fell short of expectations; feed-in tariffs fell short of expectations; wind and light abandonment rates increased.