Key points of investment
Benefiting from the decline in upstream raw material prices and optimizing the asset structure to increase the share of the renewable energy business in 2023, the company achieved revenue of 10.144 billion yuan, down 7.37% year on year, and net profit to mother of 909 million yuan, up 32.87% year on year, mainly due to: 1) The company continued to optimize its asset structure to obtain equity disposal income and debt settlement proceeds. The company transferred shares in several fossil energy power generation projects such as Wuxi, Nanjing, Puyuan, and Beijing Huarun. The total scale was about 800 MW, and acquired 583.87 MW photovoltaic power generation projects held by GCL New Energy Holdings Co., Ltd. By the end of 2023, the company's industrial and commercial distributed photovoltaic business had a total development volume of 905 MW and a construction volume of 428 MW, increasing the company's share of new energy installed capacity from 24.94% at the end of 2022 to 43.42% in 2023 (expected to increase to 80% in 2025); 2) Prices of raw materials such as natural gas and coal declined year on year, and the performance of gas and coal-fired power plants increased significantly. The power business achieved a gross profit margin of 23.98% in 2023, an increase of 8.89 percentage points over the previous year; 3) Wind power operating revenue and profit increased significantly Improvement; 4) Adjust the financing structure and channels, reduce financing costs, and significantly reduce financial expenses.
Enrich C-side commercial application scenarios, and build an “optical storage and charging” integrated energy supplementation business company to extend NEV charging and switching services to the energy application side. In the charging business, a cooperation agreement was signed with Huawei Digital Energy, and the two sides reached all-round cooperation on the construction of a liquid-cooled overcharging network. As of the disclosure date of the 2023 report, the total installed capacity of the ultra-optical storage and overcharging demonstration station at the Suzhou Yangcheng E-sports Hall was 2152 kW, and the supercharging stations were equipped with a total of 47 charging terminals to meet the needs of 47 electric vehicles to be charged simultaneously. In the power exchange business, as of December 31, 2023, the company is operating a total of 69 power exchange stations. The future will focus on the development of heavy truck closure scenarios, fixed lines or areas in mines, ports, and wharves, with commercial vehicles such as heavy trucks as the main entry point.
Integrated development of “energy+computing power” to enhance the profitability of integrated energy services The company's comprehensive energy business grew rapidly, with market-based trading services selling 247.84 kWh of electricity, an increase of 24.98%; the total management capacity of power distribution projects was 2804 MVA; participated in the Jiangsu Electric Power Adjustable Auxiliary Service Market, with a cumulative total of 14 GWh of grain filling, and more than 45 integrated energy projects such as energy storage, distributed energy, microgrids, and carbon-neutral energy stations; the annual response load of the virtual power plant reached 300MW, accounting for more than 23% of the total annual response load of Jiangsu Province; the scale of carbon finance exceeded 23% of Jiangsu Province; 25 million yuan, with a cumulative green power green certificate transaction volume exceeding 250 million kWh; in 2023, intelligent computing centers in Suzhou and Shanghai were put into operation one after another to help the country build a new power system, develop new quality productivity, and promote high-quality power development through the integrated development of “energy+computing power”.
Profit forecasting and valuation
The profit forecast was lowered and the “buy” rating was maintained. The company is a leader in clean energy operations. The company continues to optimize its asset structure, and revenue contributions to the power generation business are under pressure in the short term. We lowered our 24-25 profit forecast to be 17.48 billion yuan and 1.916 billion yuan (19.73 billion yuan and 2,571 billion yuan before the 24-25 reduction, respectively), the net profit forecast for 2026 was 2,027 billion yuan, and 1.25 yuan/share. The PE corresponding to the current stock price is 9, 8, and 7 times, respectively. Maintain a “buy” rating.
Risk warning
Macroeconomic and policy risks; project development progress falls short of expectations; market competition increases risks.