Event: The company released its 2024 semi-annual results report. In 2024, H1 achieved operating income of 20.202 billion yuan, +6.32% year-on-year; net profit to mother of 1.387 billion yuan, +10.83% year-on-year, after deducting non-attributable net profit of 1.373 billion yuan, +33.01% year-on-year. Among them, Q2 achieved revenue of 13.223 billion yuan, -1.59% YoY, +89.46%, net profit to mother of 1.054 billion yuan, +6251.60% YoY, +216.94% month-on-month, net profit of 1.044 billion yuan after deducting non-attributable net profit of 1.044 billion yuan, +9789.26% YoY and +216.72% month-on-month.

The company's performance has picked up significantly.

Fan profits have picked up, and overseas sales have achieved a high increase in volume and profit. Divided according to various business segments, the company's sales revenue for wind turbines and components reached 12.768 billion yuan, accounting for 63.20%, a gross margin of 3.75%, a year-on-year improvement of 6.3 pcts, and fan profits achieved a significant recovery; the company's wind farm development achieved revenue of 4.401 billion yuan, accounting for 21.79% and a gross profit margin of 56.44%; the company's wind power services achieved revenue of 2.374 billion yuan, accounting for 11.75% and gross profit margin of 24.77%. According to domestic and foreign markets, the company achieved domestic sales of 15.423 billion yuan, accounting for 76.35%, gross profit margin of 18.63%; the company achieved international sales of 4.779 billion yuan, +83.88% year over year, international sales increased by 10 pcts compared to 23H1, a gross profit margin of 17.02%, an improvement of 5.95 pcts compared to 23H1, and the company achieved a high increase in overseas sales.

Industrial fan tenders have increased dramatically, and the company's on-hand orders have continued to grow steadily. According to the company's announcement data, in the first half of 2024, the domestic public tender market added 66.1 GW of tender volume, +48% over the same period. Among them, 60.7 GW of additional tender capacity was added on land and 5.4 GW was added. Industrial fan tenders have increased dramatically, leading to a high increase in company orders. As of June 30, 2024, the total number of external orders pending execution was 24.5GW; the company's external orders were 10.99 GW; the total number of external orders the company had in hand was 35.56 GW, +26.40% year-on-year, of which the overseas order volume was 5.17 GW, +12.44% over the same period last year. At the end of June 2024, the company's external orders increased by about 5.8 GW compared to the end of 23. Considering that the company delivered 5.15 GW of fans in the first half of the year, the company is expected to add more than 10 GW of new orders in the first half of the year, +60% compared to the same period last year.

The scale of wind farm transfers declined, and the first half of the year's performance contributed mainly to investment income. The company's domestic and foreign self-operated wind farms added 1.08 GW of installed equity capacity, +84.3% year over year, and transferred equity grid capacity 225 MW, -69.6% year over year; 2024H1 transferred equity to wind farms and achieved equity investment income of 0.105 billion yuan, or -93.7% year over year. As of the 2024 semi-annual report, the cumulative global equity grid installed capacity is 8.14 GW, and the equity wind farm capacity under construction is 3.69 GW. The company achieved net investment income of 1.113 billion yuan in 2024H1.

Profit forecast: Due to the continued decline in fan prices, the company's performance was poor in 2022 to 2023, but considering the current recovery in the profitability of the company's fans, we expect the company to achieve net profit of 2.294/2.925/3.523 billion yuan from 2024 to 2026, corresponding to the PE valuation 15.1/11.8/9.8 times, and maintain a “buy” rating.

Risk warning: Wind power installations fall short of expectations, fan prices have dropped sharply, and vicious fan competition has intensified again.