Description of the event
Linyang Energy released the 2023 annual report and the 2024 first quarter report. In 2023, the company achieved revenue of 6.872 billion yuan, a year-on-year increase of 39%, and net profit of 1,031 billion yuan, up 20.48%; 2023Q4 achieved revenue of 2.112 billion yuan, up 58.21% year on year, up 37.91% month on month, net profit to mother 180 million yuan, up 47.65% year on year, down 33.18% month on month; 2024Q1 achieved revenue of 1,554 billion yuan, up 45.95% year on year, down year-on-month Net profit of 26.77% to mother was 218 million yuan, up 10.78% year on year and 20.81% month on month.
Incident comments
In 2023, the company's energy storage sector exploded, and the new energy sector grew steadily. In the energy storage sector, the company achieved system delivery of more than 2 GWh in 2023. The energy storage and energy saving sector achieved total revenue of 1,506 billion yuan, +253.62% over the same period last year. In the new energy sector, it is clear that power plant development will be accelerated. In 2023, the company's projects under construction will exceed 1,000 MW, the grid connection scale will exceed 600 MW, and the first wind power project will be connected to the grid. The company's photovoltaic power generation business revenue was 887 million yuan, -32.68% year-on-year.
In the smart sector, the company's State Grid and South Grid won bids of about 626 million yuan and 299 million yuan respectively in 2023. Overseas products have covered more than 30 countries and regions around the world. The smart sector has achieved revenue of 2,476 billion yuan and gross margin of 33.93%, an increase of 2.53 pcts over the previous year.
The company's management level is stable. The cost rate during 2023 was 11.07%, a year-on-year decrease of 2.63 pcts, and the cost rate during 2024Q1 was 13.66%, a year-on-year decrease of 5.28 pcts.
Looking ahead, the company's performance will grow steadily, and the dividend ratio will be high. In 2024, the company's energy storage and power plant business is expected to maintain steady growth. The company has accumulated more than 6 GWh of energy storage project resources and signed strategic cooperation agreements with various industry partners; the company continues to explore the green energy consumption market system and the environmental value of new energy projects based on self-owned affordable power plants. The smart sector closely follows the pace of central and state-owned enterprises going overseas, breaking through the Indonesian market for the first time in 2024, achieving large-scale batch delivery, and will further expand into neighboring Southeast Asian markets such as Malaysia, Thailand, and Vietnam. The company plans to distribute a cash dividend of 618 million yuan in 2023. In addition to the repurchase amount during the year, the total cash dividend ratio is 65.02% larger. Considering that the company has no plans for large capital expenditure in the future, the dividend ratio is expected to remain at a high level.
We expect the company to achieve net profit of 1.19 billion yuan in 2024, which is 11 times the corresponding PE.
Risk warning
1. Deterioration of the competitive landscape;
2. PV installation falls short of expectations.