Incident: The company released its 2023 annual report and 2024 quarterly report, with short-term pressure on performance.
1) The company achieved revenue of 1,685 billion yuan in 2023, +3.22% year on year; net profit attributable to mother - 88 million yuan, -143.00% year on year; deducted non-net profit - 117 million yuan, -340.14% year on year; gross profit margin of 9.77%, year-on-year.
2) Corresponding to Q4 revenue of 131 million yuan, -71.73% year-on-year, -74.67% month-on-month; net profit to mother - 153 million yuan; deducted non-net profit - 164 million yuan; gross profit margin -21.80%.
3) 2024Q1 achieved revenue of 124 million yuan, -75.22%; net profit to mother of 74 million yuan, -10.28% year on year; deducted non-net profit of 73 million yuan, +5.60% year on year; gross profit margin of 5.05%, -10.44pct year on year.
In 2023, the main reason for the company's losses was the decline in product prices brought about by Haifeng parity and insufficient phased market demand after the “rush wave”. Coupled with the small online power generation capacity of the wind farm in which the company participated, and the increase in depreciation and amortization after the construction and renovation of the new base, these factors all affected the company's profit scale; at the same time, due to the influence of the settlement progress of completed projects during the “rush to buy” period, the company carried out asset impairment tests on accounts receivable and contract assets. Correlation of signs of loss Assets have been prepared for impairment accordingly, with a cumulative total of 184 million yuan in impairment for the whole year.
Short-term demand for sea breezes is insufficient, leading to a decline in the company's product performance.
In 2023, wind tower revenue was 394 million yuan, +16.78% YoY, gross profit margin 3.52%, YoY -7.11pct; pile foundation revenue was 1,105 billion yuan, YoY -11.53%, gross profit margin 10.32%, YoY -3.25pct; conduit rack revenue was 119 million yuan, gross profit margin -5.49%. The total revenue of wind power equipment was 1,636 billion yuan, +3.10% year on year; gross profit margin was 7.52%, -5.40 pct year on year. In the past two years, the offshore wind power industry has been affected by various factors. The pace of development has slowed down and industry demand has been insufficient. As a result, sales and prices of the company's products have declined. At the same time, insufficient capacity utilization and depreciation have been greatly affected, and the gross margin of wind power products has dropped a lot.
Looking forward to the future, the total grid-connected capacity target of the “14th Five-Year Plan” offshore wind power plan in domestic coastal provinces and cities has yet to be released, and offshore wind power projects are rich in reserves. 2024 to 2025 is a key point in the latter half of the “14th Five-Year Plan”, and the industry is expected to usher in large-scale development and construction.
Firmly adhere to the “sea+overseas” strategy and expand domestic market coverage.
The company has always adhered to the “offshore plus overseas” strategy, expanded domestic market coverage, accelerated overseas market development, focused on the main seabreeze business, and built an international marine equipment group. “10+” base:
The company identified multiple bases outside the province, such as Dongying, Shandong; Yangpu, Danzhou, Hainan; Wenzhou, Zhejiang; Zhanjiang, Guangdong; as well as three provincial bases: Xiaoyangkou in Rudong County, Jiangsu Province, Binhai Port in Yancheng City, Jiangsu Province, and Lusigang in Qidong City, Jiangsu Province, superimposing the Haili Offshore, Haili equipment and Haiheng equipment currently in operation, and has basically completed the base layout. Each base has obvious complementary advantages and clear responsibilities, which will strongly improve the company's product production capacity structure and lay a solid foundation for the development of the company's main business.
Investment advice: The company actively promotes the multi-regional layout of offshore manufacturing bases, and is expected to achieve rapid growth in performance as offshore wind power is launched. We expect the company's revenue in 2024-2026 to be 4,006 billion yuan, 6.590 billion yuan, and 8.177 billion yuan, respectively, +137.69%, +59.52%, and +27.96%; net profit to mother will be 456 million yuan, 725 million yuan, and 1.05 billion yuan, respectively, reversing losses year-on-year, +58.56% and +38.62%; EPS will be 2.10/3.33/4.62 yuan, respectively. The current stock price corresponds to PE is 24/15/11 times, maintaining a “buy” rating.
Risk warning: wind power installation falls short of expectations, sharp increase in raw material prices, worsening industry competition pattern, etc.