煤电容量机制出台，火电投资加快落地。23 全年国内火电投资完成额达1029 亿元，同比+15%；1H24 为535 亿元，同比+26.6%，火电投资呈加速态势。公司干式/湿式除渣系统及低温烟气余热深度回收系统业务合计营收4.4 亿元，同比+61.5%，预计主要由于低温烟气余热深度回收系统进入集中更换周期，订单需求旺盛驱动（该业务营收2.2 亿元，同比+157.8%）。Brief performance review
On the evening of August 28, the company disclosed its 24 annual report results. The company achieved revenue of 0.51 billion yuan, +45.8% year-on-year; net profit to mother was 23.98 million yuan, +85.99% year-on-year. Among them, Q2 achieved revenue of 0.37 billion yuan, +32.6% year over year, and realized net profit of 0.02 billion yuan to mother, +49.3% year over year.
Management analysis
A coal-power capacity mechanism was introduced, and investment in thermal power was implemented at an accelerated pace. 23 Domestic thermal power investment reached 102.9 billion yuan throughout the year, +15% year over year; 1H24 was 53.5 billion yuan, +26.6% year over year, and thermal power investment is accelerating. The company's dry/wet slag removal system and low-temperature flue gas waste heat deep recovery system business had a total revenue of 0.44 billion yuan, +61.5% year over year. It is expected to be driven by strong order demand, mainly due to the deep recovery system of low temperature flue gas waste heat entering a centralized replacement cycle (this business revenue is 0.22 billion yuan, +157.8% year over year).
Policies are being intensively catalyzed, and demand is still waiting to be released to transform the business. The company's 1H24 full-load denitrification business revenue ratio was -43.5%. Judging that the transformation demand still requires policy efforts and push for release from the top down. 2M24's “Guiding Opinions on Strengthening Capacity Building for Peak Shifting Energy and Intelligent Scheduling in Power Grids” proposes “strengthening peak shifting capacity building, focusing on improving the peak shifting capacity of supporting power sources, and achieving 'thorough improvement' of existing coal power units by 2027.” 5M24's “2024-2025 Energy Saving and Carbon Reduction Action Plan” once again proposes “promoting the 'three reforms linkage' of energy saving and carbon reduction transformation, flexibility transformation, and heating transformation”.
The 120MW fishery and light complementary supporting hydrogen production project is expected to be put into operation within 24 years to begin the hydrogen energy layout. The company used financial leasing as the general contractor to invest in the project. According to the plan, after the project is approved, the supporting hydrogen production project will be divested to a lower-level subsidiary of the company, and 100% of the remaining assets will be transferred in accordance with the agreement. This is an important layout for the company's technology research and development and manufacturing in the field of hydrogen energy equipment.
New plant equipment was purchased, and management rates increased in the current period. Downstream CAPEX boom cycle companies increase investment. Due to factors such as the increase in management personnel and depreciation of new assets (newly purchased plant equipment in the current period), 1H24's management expenses were +64.9% year-on-year (accounting for +1.4pct of revenue).
Profit Forecasts, Valuations, and Ratings
We expect the company to achieve net profit of 0.13/0.16/0.18 billion yuan and EPS of 1.06/1.29/1.46 yuan respectively from 2024 to 2026, corresponding to PE of 11 times, 9 times, and 8 times, respectively, maintaining a “buy” rating.
Risk warning
The scale of new thermal power installations falls short of expectations, the progress of thermal power flexibility transformation falls short of expectations, new business expansion falls short of expectations, etc.
