Core views

The company achieved operating income of 194.26 billion yuan in the first half of the year, an increase of 1.1% over the previous year, and realized a net profit of 2.78 billion yuan to mother, an increase of 4.7% over the previous year. The company's profitability increased steadily in the first half of the year. The overall gross margin increased 1.3 percentage points over the same period last year. Among them, the gross margin of investment and operation business increased by 14.4 percentage points, while the expense ratio increased by 0.9 percentage points during the period, and the impairment rate increased by 0.59 billion yuan, which dragged down the profit growth rate. The company's new orders increased by 14.4% year-on-year in the first half of the year. The main increase came from the company's main battlefield energy business.

occurrences

The company released its 2024 mid-year report, achieving operating income of 194.26 billion yuan, a year-on-year increase of 1.1%, and a net profit of 2.78 billion yuan to mother, an increase of 4.7% over the previous year.

Brief review

Profitability is growing steadily. The company achieved operating income of 194.26 billion yuan in the first half of the year, an increase of 1.1% over the previous year, and realized a net profit of 2.78 billion yuan to mother, an increase of 4.7% over the previous year. The company's profitability increased steadily. The overall gross margin for the first half of the year was 12.2%, an increase of 1.3 percentage points over the same period last year. The overall gross profit was 23.69 billion yuan, an increase of 12.9% over the previous year. By business, the gross margin of the survey and design/ engineering construction/ investment and operation business increased by 0.3/0.5/14.4 percentage points, respectively, and the gross margin of the industrial manufacturing business decreased by 1.6 percentage points compared to the same period last year. The reason for the low growth rate of net profit attributable to mother is 1) the increase in the cost ratio for the first half of the year. The company's expense ratio for the first half of the year was 8.2%, up 0.9 percentage points from the same period last year, with sales/management/financial/R&D expenses each increased by 0.1/0.4/0.3 percentage points; 2) there was a lot of accrued impairment. The company's asset impairment and credit impairment each accrued 0.3/0.96 billion yuan in the first half of the year, an increase of 0.21/0.38 billion yuan each over the same period last year.

Energy orders continue to grow at a high rate. The company signed new orders of 738.6 billion yuan in the first half of the year, an increase of 14.4% over the previous year. Among them, engineering construction/survey and design consulting/industrial manufacturing signed new orders of 656.4/11.4/60.3 billion yuan respectively, with year-on-year growth rates of 6.8%/-4.1%/358.6%, respectively. Looking at engineering construction orders by sector, the amount of new orders for traditional energy/new energy/urban construction/integrated transportation was 2043/293.3/90.8/12 billion yuan respectively, with year-on-year growth rates of 63.8%/5.1%/-17.9%/-66.3%, respectively. Against the backdrop of national energy investment maintaining a high boom, the company's main battlefield energy orders continued the high growth trend last year. By region, new domestic and overseas orders in the first half of the year were 563.2/175.4 billion yuan respectively, up 15.8%/9.9% year on year.

Energy investment and operations are growing steadily. In the first half of the year, the company's new energy and integrated smart energy achieved revenue of 2.39 billion yuan, a year-on-year increase of 48.4%, and gross margin of 46.1%, an increase of 2.6 percentage points over the same period last year. In terms of installed capacity, as of the end of June, the company held an installed capacity of 11.64 million kilowatts of grid-connected new energy, an increase of 2.13 million kilowatts over the end of last year. In addition to investing in the new energy power generation business, the pace of investment in the company's new energy storage business accelerated. By the end of June, the company's new energy storage installed capacity was 0.66 million kilowatts, an increase of 0.56 million kilowatts over the end of last year.

Keep the profit forecast and target price of 3.07 yuan unchanged. We keep the company's profit forecast unchanged. The net profit due to mother for 2024-2026 is 9.1/10.29/11.55 billion yuan, respectively, and the corresponding EPS is 0.22/0.25/0.28 yuan, respectively. We are optimistic about the company's scale and technical advantages in the energy sector. On the basis of continuing to deepen energy construction, it will transform to integrated energy investment, construction and operation, and keep the purchase rating and target price of 3.07 yuan unchanged.

Risk analysis

The company's main risks are as follows:

1. The risk of new energy installations falling short of expectations. The promotion of new energy installations may fall short of expectations due to factors such as price disturbances in upstream components and the project approval process.

2. The risk of thermal power projects falling short of expectations. It is expected that the company's thermal power survey and design orders will gradually be converted into engineering orders, but high coal prices will erode thermal power profits and may hinder investment and construction of thermal power projects.

3. The risk that energy storage and hydrogen energy business development falls short of expectations. The company develops various types of energy storage businesses and hydrogen energy businesses. Currently, the profitability and development scale of the energy storage and hydrogen energy business have yet to be improved, and there is uncertainty about the development and profitability of the company's energy storage business.

4. The company's balance ratio is too high, which may adversely affect normal operations.