Core ideas:
The results of 23H1 and 23Q2 have declined. According to the company's mid-23 report, 23H1 achieved revenue of 1.717 billion yuan,-3.36% year-on-year, and net profit of 259 million yuan,-36.14% year-on-year. 23Q2 realized revenue of 891 million yuan,-4.21% year-on-year, and net profit of 143 million yuan,-34.11% year-on-year.
Grid operation business: affected by seasonal electricity price fluctuations, 23H1 gross margin declined. 23H1 revenue is 856 million yuan,-5.39% compared with the same period last year, gross profit is from-12.07pct to 6.35%, gross profit is 54 million yuan (22H1 is 167 million yuan). 23H1 Fuling District, Chongqing, industrial electricity consumption + 6.62% year-on-year, so the decline in gross margin is mainly affected by seasonal electricity price fluctuations: power shortage in the summer of 22, rising electricity prices, and a decline in superimposed hydropower procurement costs, resulting in a high base margin. In addition, the meter reading time of customers in the power supply area will be adjusted uniformly in 22 years, and the electricity bill will be settled according to the natural month, and the meter reading day will be unified to 24:00 at the end of each month, resulting in an inconsistent 23-year and 22-year electricity settlement cycle and a 23-year gross profit decline.
Distribution network energy-saving business: the gross profit margin is relatively stable, and the correction of income tax leads to an increase in expenses. 23H1's revenue was 861 million yuan,-1.25% compared with the same period last year, the gross profit margin was stable in the range of 38% RMB40%, and the gross profit was 327 million yuan, slightly lower than the same period last year. The main reason is that the progress of post-epidemic projects has not yet speeded up, considering that the 23-year capital expenditure plan will reach 1.218 billion yuan, which is expected to increase. The company corrected the income tax for the previous year of the acquisition project, and the income tax expense reached 53 million yuan (22H1 was 16 million yuan), resulting in a decline in profits.
The company will soon be light to deal with the problems left over from history, and integrated energy services and energy storage are expected to contribute to the growth highlights. The company focuses on the income tax of the early acquisition of distribution network energy-saving projects, power grid operation meter reading and other issues, the follow-up will be light. It was announced in May that the Deputy General Manager of the Comprehensive Energy Division of the State Grid Comprehensive Energy Group and the General Manager of the Energy Storage Department of the State Grid Comprehensive Energy Group were appointed as the Deputy General Manager of the listed company, and the follow-up comprehensive energy services and energy storage business development should be paid more attention to.
Profit forecast and investment advice: it is estimated that the net return profit for 23-25 years is 8.12 RMB 9.31 billion RMB, an increase of 32.5%, 14.6% and 25.7% over the same period last year. Give the company 25.0x PE for 23 years, corresponding to a fair value of 18.50 yuan per share, and maintain a "buy" rating.
Risk hint: the approved transmission and distribution price has declined; the growth of electricity consumption is not as expected; the development and production progress of distribution network energy-saving projects is not as expected.