Key points of investment
The project reserves are abundant, and the proposed projects under construction reached a record high of 2.9 GW:
In 2023, the company achieved revenue of RMB 2,589 million, up 7.85% year on year; profit attributable to equity holders was $964 million, up 10.55% year on year; basic profit per share was 11.42 points, with a dividend of HK$0.035 per share (dividend ratio of approximately 28%). The company has sufficient project reserves. The proposed project scale is 2.9 GW at the end of 2023, which strongly guarantees the continued growth of installed capacity. Among them, the target is to add 1 GW of installed capacity in 2024, and the annual capital expenditure is around RMB 4 to 60 billion yuan.
Equity power generation increased 46.32% year-on-year in February, with impressive performance:
The total equity power generation in February 2024 was 872.28 GWh, up 46.32% year on year; among them, wind power equity power generation was 810.80 GWh, up 49.6% year on year; solar equity power generation was 61.48 GWh, up 13.52% year on year. In January-January, total equity power generation was 1628.51 GWh, up 31.16% year on year; among them, wind power equity power generation was 1496.49 GWh, up 32.23% year on year; solar equity power generation was 132.02 GWh, up 20.15% year on year.
Compared with the industry benchmark Longyuan Electric Power (wind power generation capacity +8.81% in February, cumulative wind power generation -0.62% in January-January), the company's data performance was impressive, mainly due to a sharp year-on-year increase in wind resources in the region.
Continued share repurchases in 2024 to enhance earnings per share:
In 2023, the company's share repurchases were frequent, with a cumulative repurchase ratio of 5%. The repurchase of the company's shares was beneficial to increasing management's shareholding ratio, obtaining stable returns, conforming to the interests of all shareholders, helping to boost market confidence, and was unanimously recognized by shareholders. In 2024, the company will take the opportunity to repurchase shares (10% authorized by the board of directors), which is conducive to continuing to increase the company's earnings per share.
The valuation advantage is obvious. The purchase rating is maintained, and the target price is HK$0.99:
The company's valuation advantage is obvious. Currently, the stock price is only about 4.4 times the 2023 PE. We have updated our target price of HK$0.99, which is equivalent to 6.5 times and 6 times PE in 2024 and 2025. The target price has room for 48% increase from the current price, and maintains the buy rating.