Report summary

Incident: The company released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved revenue of 10.144 billion yuan, a year-on-year decrease of 7.38%, and net profit of 909 million yuan, an increase of 32.87%; in 2024Q1, revenue of 2,414 billion yuan, a year-on-year decrease of 11.09%, and net profit to mother of 188 million yuan, a year-on-year decrease of 39.58%

Short-term performance is under pressure, waiting for new business such as storage and charging to expand

In the first quarter of 2024, the company's net profit to mother was 188 million yuan, down from the previous year. On the one hand, there was a large investment in initial costs and expenses in the development and construction of storage and charging projects, and on the other hand, other income and investment income received by the company through equity disposal, debt settlement, and government subsidies declined year-on-year. Looking ahead to 2024, the company will focus on investment and development of wind power storage and charging projects based on the operation of existing power assets. At the same time, it will also improve management through optimized operation and project equity cooperation, etc., and the company's profits are expected to grow steadily.

The basic market of the main business is stable, and the share of renewable energy is rapidly increasing

The company continues to optimize its asset structure, increase the share of renewable energy, transfer shares in several fossil energy power generation projects such as Wuxi, Nanjing, and Puyuan in 2023, and acquire 583.87 MW photovoltaic power generation projects owned by GCL New Energy Holdings Co., Ltd. By the end of the first quarter of '24, the total installed capacity of the company was 4215.27MW. Of these, the share of installed renewable energy increased to 51.74%, up 8.34% month-on-month, and the installed capacity of coal-fired engines decreased by 8.32% month-on-month. Among them, in the second half of 2023, the company launched the “Xinyangguang” household photovoltaic business while strengthening the original industrial and commercial distributed development; in the first quarter of 2024, the “Xinyangguang” business added 334.6 MW of shipments, 179.5 MW of grid connections, 426 MW of distributed industrial and commercial photovoltaics, and 160 MW of new construction.

The integrated optical storage and charging application scenario continues to be improved, and energy+computing power collaboration is steadily promoting the company's expansion of the charging business to the energy application side. As of March 31, 2024, the company has developed a total of 3,483 DC piles and a total of 932 guns; in 2023, the company cooperated with Huawei Digital Energy to build a liquid-cooled supercharging network. Recently, the supercharging station at the Suzhou Yangcheng Lake International E-sports Stadium officially opened, and more overcharging demonstration stations will be put into operation one after another. In the computing power business, by the end of 23, the Suzhou and Shanghai Intelligent Computing Centers were put into operation one after another. Currently, the company continues to promote the deep integration of intelligent computing and energy, and continuously strengthen the construction of computing power infrastructure. In the first quarter of 2024, the company successfully put into operation more than 1,000 P computing power resources, and sufficient in-transit computing power reserves. The collaborative development of energy+computing power is expected to enter the fast track.

Investment advice

The company is expected to achieve revenue of 12.819 billion yuan/15.339 billion yuan/18.276 billion yuan and net profit to mother of 1,295 billion yuan/1,604 billion yuan/1,969 billion yuan. The price-earnings ratio corresponding to the current stock price is 11.7X/9.5X/7.7X, maintaining a “buy” rating.

Risk warning

Macroeconomic downturn; fluctuating raw material prices; risk of changes in electric vehicle policies; customer expansion falling short of expectations; computing power business falling short of expectations, etc.