Incidents:
The company released the “2023 Annual Report” after closing on April 2, 2024.
Comment:
Revenue achieved steady growth, and profitability improved significantly
In 2023, the company achieved operating income of 4.727 billion yuan, an increase of 3.86% over the previous year; achieved net profit of 604 million yuan, an increase of 17.44% over the previous year; and realized net profit without deduction of 533 million yuan, an increase of 33.64% over the previous year. By business, the energy digitization business achieved revenue of 2,321 billion yuan, up 7.49% year on year, gross margin of 40.34%; energy internet business achieved revenue of 1,534 billion yuan, up 38.97% year on year, gross margin of 39.72%; Internet TV business achieved revenue of 872 million yuan, down 32.31% year on year, and gross margin of 43.65%.
The digital transformation of the energy industry continues to deepen. The company focuses on energy digitization business in power grid-related fields. The company's grid-related energy digitization business maintains a good development trend, revenue continues to grow, and its market position is further consolidated and strengthened. During the year, the company completed the launch of the marketing 2.0 system in Shanghai, Shanxi, Hubei, Hebei, Henan and other provinces, and achieved good results; around the construction of a new power system, based on different load attributes and scenarios on the user side, the company built and upgraded load control systems in multiple State Grid and South Grid provinces; formed rich solutions around hot topics such as marketing optimization, load forecasting, and carbon emissions in the field of energy big data, and strengthened exploration and R&D combined with big models; the company continued to streamline non-grid digital business, and the team further optimized.
The energy Internet business is growing rapidly, creating a benchmark case for “Vehicle Energy Road Cloud”. In terms of the energy Internet business, the company's living payment business has accumulated more than 450 million total service users, more than 14 million daily active users, and more than 6,200 connected public service payment institutions, maintaining the growth trend and leading position in the market. The “New Electric Road” converged charging platform business continued to develop rapidly. By the end of 2023, the platform had more than 1.1 million charging equipment coverage, more than 11 million registered users, and 4 billion kilowatts of aggregate charging in 2023, doubling the year-on-year increase, and the share of the public charging market further increased. The impact of “New Telecom” operating losses on the net profit of listed companies in 2023 is about 90 million yuan, and the efficiency of marketing subsidies continues to improve. The company grasped new opportunities in the “Vehicle Energy Road Cloud” industry and successfully won the bid for the Wuhan East Lake Project to provide customers with services such as integrated traffic management platform construction, intelligent parking transformation, intelligent charging pile system construction, and community parking lot data management. While building benchmark cases based on this project, it is expanding markets in many provinces and cities. The company's virtual power plant business has developed rapidly. The PV cloud platform has connected about 140,000 new distributed photovoltaic power plants with a capacity of about 4 GW.
Profit forecasting and investment advice
The company is a leading technology enterprise in the energy industry. It is expected to fully benefit from the “dual carbon” strategy and the continuous advancement of electricity market-based reforms, and there is plenty of room for continued growth in the future. The company's 2024-2026 revenue is estimated to be $55.36, 64.73, and 7.510 billion yuan, net profit to mother of 705, 8.65, and 1,019 million yuan, EPS of 0.65, 0.80, 0.94 yuan/share, corresponding PE of 16.95, 13.82, and 11.73 times.
Maintaining a “buy” rating considering the industry's room for growth and the continued growth of the company's business.
Risk warning
Risk of dependency on a small number of group customers; risk of seasonal fluctuations in business performance; risk of rising costs due to business and technological innovation; risk of rising labor costs.