Incident: The company released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved revenue of 14.443 billion yuan, -3.42% year-on-year, and net profit to mother of 908 million yuan, +34.66% year-on-year. 24Q1 achieved revenue of 38.15 billion yuan, -5.21% year-on-year, and net profit of 619 million yuan to mother, +22.94% year-on-year.
Profitability increased steadily, and financial expenses for the year decreased by 350 million yuan year over year. The company's gross profit margin and net profit margin reached 25.75% and 10.82% respectively in 2023, up 1.83 pct and 2.93 pct, respectively, from 2022. 23Q4 achieved operating income of 3.421 billion yuan, -11.94% year on year, and realized net profit to mother of 177 million yuan, -18.00% year on year. In terms of expenses, the company's annual R&D expenses in 2023 reached 787.601 million yuan, +26.87% year-on-year, and management expenses reached 213 million yuan, +24.90% year-on-year; financial expenses were 1,482 million yuan, a decrease of 350 million yuan compared to the same period last year, or -19.16% year-on-year.
Clean energy installations are being deployed at an accelerated pace, and power generation capacity has been further increased. By the end of 2023, the company's total installed power generation capacity was 13.422 million kilowatts, +8.55% over the same period last year. Among them, the installed capacity of thermal power was 3.3 million kilowatts, the same as last year; in 2023, the company actively deployed the clean energy industry, with an installed capacity of 10.1212 million kilowatts of clean energy, +11.7% compared with the same period last year, including 6.2231 million kilowatts of photovoltaics and 3.4681 million kilowatts of wind power. In terms of power generation, by the end of 2023, the company's power generation capacity reached 28.578 billion kilowatt-hours, +3.15% year-on-year, of which 9 billion kilowatt-hours of photovoltaic power generation and 6.832 billion kilowatt-hours of wind power generation.
The fixed increase has been approved, and the reserve project is sufficient. On April 30, the company was successfully approved to issue shares to specific targets. The company was approved to issue no more than 837 million new shares to specific targets, and the total capital raised was not more than 5,539 million yuan. According to the company's plan, the capital raised is mainly used to invest in the construction of hydrogen energy and new energy projects, including the Daan Scenery Integrated Demonstration Project for Green Hydrogen Production (32,000 tons/year), Baicheng Green Power Park Supporting Wind Power Phase I Project (100 MW), the Jilin Fuyu Phase V Wind Power Project (100 MW), the Jilin Changling Wind Power Project (100 MW), and the Nanning Yongning Photovoltaic Project (300 MW).
Investment advice and valuation: The company's revenue from 2024 to 2026 is expected to be RMB 15.051 billion, RMB 16.406 billion and RMB 18.097 billion respectively, with revenue growth rates reaching 4.2%, 9.0% and 10.3% respectively, and net profit to mother of RMB 1,226 billion, RMB 1,492 billion, and RMB 1,751 billion respectively. Net profit growth rates will reach 34.9%, 21.7%, and 17.3% respectively, maintaining the “increase” investment rating.
Risk warning: New wind power and photovoltaic installations fall short of expectations, risk of fluctuations in coal prices, risk of drastic reduction in electricity prices, etc.