3Q 新签生效订单增速亮眼，在手订单充沛有望支撑公司业绩稳健增长。1-3Q24 公司新增生效订单812.51 亿元，同比+26.5%；其中3Q24 新增生效订单251.78 亿元，同比+63.8%，清洁高效能源装备/可再生能源装备/工程与贸易/现代制造服务业/新兴成长产业分别同比+43.9%/+152.3%/+65.5%/-28.8%/+103.1%。截至3Q24 末，公司合同负债398.4 亿元，环比增长9.6%。根据公司披露1，截至今年上半年公司在手订单已超过1200 亿元，我们预计后续有望逐年稳健兑现业绩。3Q24 results are basically in line with our expectations
The company announced 3Q24 results: 1-3Q24 revenue of 47.025 billion yuan, +7.1% year on year; net profit to mother of 2.625 billion yuan, -9.9% year on year; net profit after deducting non-return to mother of 2.469 billion yuan, -8.2% year on year.
Among them, 3Q24 revenue was 14.097 billion yuan, -3.3% year over year; net profit to mother was 0.933 billion yuan, +2.6% year over year; net profit not attributable to mother was 0.834 billion yuan, -4.1% year over year. The results were largely in line with our expectations.
The growth rate of newly signed orders in 3Q was impressive, and abundant orders in hand are expected to support the steady growth of the company's performance. 1-3Q24 added effective orders of 81.251 billion yuan, or +26.5% year-on-year; of these, 3Q24 added 25.178 billion yuan of effective orders, +63.8% YoY. Clean and efficient energy equipment/renewable energy equipment/engineering and trade/modern manufacturing services/emerging growth industries were +43.9%/+152.3%/+65.5%/-28.8%/+103.1%, respectively. By the end of 3Q24, the company's contract debt was 39.84 billion yuan, an increase of 9.6% over the previous month. According to the company's disclosure1, as of the first half of this year, the company's active orders have exceeded 120 billion yuan, and we expect to steadily deliver results year by year in the future.
Low-margin orders have gradually been digested, and profits have improved markedly. The gross margin for 3Q24 was 16.6%, -0.7/+4.0ppt, respectively. We believe it is mainly due to the gradual digestion of previous low margin orders for coal and electricity, and the gross margin is expected to increase steadily in the future after all are digested. 3Q24 sales/management/R&D/finance expense ratios were -0.1/-0.7/+0.2/-0.2ppt to 2.4%/4.8%/4.6%/0.1%, respectively; net profit margin to mother was about 6.6%, +0.4/+2.3ppt, respectively.
Development trends
The company's card power system adjusts the track flexibly, and the long-term boom is expected to continue. Flexible adjustment capabilities are scarce in new power systems. Thermal power flexibility, pumped energy storage, and new energy storage are all important regulation resources, and there is broad scope for development. The company won bids for several projects in the “Three Reform Linkage” market. The revenue of the power plant service sector grew 84.8% year-on-year in the first half of the year, and the energy-saving transformation market share remained at the top. This year, the company won consecutive bids for savings projects such as Ningguo in Anhui, Shankou in Qinghai, and Gongshang in Henan, with obvious leading advantages.
Renewable energy and overseas business continue to gain strength. As of mid-July, the company's total bid capacity for wind power exceeded 7 million kilowatts, reaching the full year of 2023; the company signed a contract for the complete mechanical and electrical project for the Koisha Hydropower Station in Ethiopia, which is currently the largest stand-alone hydropower project exported by China's own brand to Africa2.
Profit forecasting and valuation
The profit forecast for 2024/2025 remains unchanged. The current A and H share prices correspond to 13.2/10.5 and 7.7/6.0 times P/E in 2024/2025, respectively. Maintaining A/H shares outperforming the industry rating. The target price for A/H shares is 17 yuan/HK$11.6, corresponding to 14.2/11.3 times and 8.7/6.8 times P/E in 2024/2025, respectively, with 7.8%/13.5% upside compared to the current stock price.
risks
Low-profit orders are being absorbed faster, power investment growth is less than expected, and raw material costs have risen above expectations.
