Performance summary: In 2022, the company achieved operating income of 10.683 billion yuan, a decrease of 5.7% over the previous year, and Guimu's net profit of 680 million yuan, a year-on-year decrease of 32.92%. The first quarter of 2023 achieved revenue of 2,855 million yuan, an increase of 9.57% over the previous year, and Guimu's net profit of 325 million yuan, an increase of 91.07% over the previous year.
Profitability improved markedly, and first-quarter results were off to a good start.
Influenced by the external environment in 2022, such as the Russian-Ukrainian conflict and increased international inflation, fuel prices such as natural gas and coal continued to be high. Electricity prices for power generation companies continued to rise along with fuel prices, and the power industry's costs were under pressure and profitability declined. 2023Q1, the company's net profit was 325 million yuan, an increase of 91.07% over the previous year, close to the upper limit of the growth rate forecast; the gross profit margin was 16.78%, a slight decrease of 1.79 pcts over the previous year, an increase of 8.10 pcts over the previous month, and the net profit margin was 11.52%, an increase of 4.49 pcts over the previous year. The company's performance in the first quarter was impressive. The main reasons include: ① the company strengthened the availability and operation of renewable projects such as wind power, and the company's wind power revenue and profit increased dramatically year-on-year; ② the energy consumption of the company's generator sets fell and electricity prices rose, and the profitability of cogeneration units increased; ③ significant results were achieved in adjusting the financing structure and channels and reducing financing costs; ④ the disposal proceeds of related claims and equity were obtained during the reporting period.
Clean energy installations have been further improved, and dynamic optimization adjustments guarantee unit profit.
As of March 31, 2023, the total grid-connected installed capacity of the company was 3659.04MW, of which 2437.14 MW of combustion engine cogeneration, 743.90 MW of wind power, 60 MW of biomass power generation, 116 MW of waste-to-energy power generation, and 302 MW of coal-fired cogeneration, accounting for 91.75% of the installed capacity of clean energy, mainly natural gas and wind energy. The Zhejiang Jiande Pumped Storage Power Station project controlled by the company has an installed capacity of 2,400 MW. It has been included as a key implementation project of the national “Medium- and Long-Term Pumped Energy Storage Development Plan” and the “14th Five-Year Plan” for energy development in Zhejiang Province. At present, the project has started and is progressing steadily according to construction points. In terms of integrated energy services, in the first quarter of 2023, the company's market-based transaction service capacity was 4.753 billion kWh, the cumulative management capacity of power distribution projects was 2,111 MWA. The electricity sales market business in Zhejiang and Sichuan was fully developed, serving more than 600 users, and the user-side management capacity exceeded 14 million KVA.
The mobile energy business continues to advance, and is expected to contribute to increased performance after scaling up.
As of March 31, 2023, the company is operating and constructing 72 integrated energy stations for passenger vehicles and 43 integrated energy stations for commercial vehicles. Among them, passenger stations are mainly located in Hangzhou, Guangzhou, Wuxi, Suzhou and other regions. Commercial stations are mainly distributed in coal power, mines, steel mills and urban muck scenes in Hebei, Inner Mongolia, Shaanxi, Shanxi, and Xuzhou, Jiangsu. Looking ahead to 2023, we expect that as the domestic economic situation improves, the power exchange business will be implemented at an accelerated pace, and convertible bond fund-raising projects are expected to accelerate, which is expected to contribute to an increase in performance in the future.
Lay out AI computing power and create a new growth curve with the “electricity+storage+computing” integrated service.
Recently, the company announced that it plans to invest 300 million yuan to increase the capital of Starlink Technology. After the capital increase is completed, it will hold 10% of its shares. Starlink Technology's main business focuses on the field of single-phase submersible liquid-cooled data centers and GPUs for high-performance cloud computing. It has a complete technology platform including IaaS and PaaS MaaS. It can provide professional computing power services for various industries such as general artificial intelligence model training and inference, life science, film and television rendering, blockchain, cloud gaming, autonomous driving, etc. It has now signed a contract to build a 10-billion-scale liquid-cooled superintelligence center in Anhui to provide ultra-cost-effective computing services for R&D and training of large-scale domestic models, intelligent upgrading of “AI+” industries in various industries. The original shareholders of Xinglin Technology promised that from the signing of the agreement until the end of 2026, the total net profit of Xinglin Technology will not be less than 1.05 billion yuan. In the future, the company will use its advantages in the “source network storage” integrated model industry from power generation to distribution of electricity, mobile energy storage, and energy efficiency management to provide green and low-carbon energy solutions for AI computing power business. Market competitiveness and profitability are expected to further improve.
Investment advice
The company's net profit from 2023-2025 is estimated to be 1,420 million yuan, 1,828 million yuan, and 2,244 million yuan respectively. Corresponding to the current PE of 16.3X/12.6X/10.3X respectively, it maintains the “buy” rating.
Risk warning
Macroeconomic downturn; fluctuations in raw material prices; risk of changes in electric vehicle policies; customer expansion falling short of expectations, etc.