The company released its semi-annual report for 2023. Performance fell 49.75% year on year. The company's fan sales volume increased, and revenue and profitability declined; however, fan orders were sufficient, and internationalization progressed rapidly. Maintain ratings to increase holdings.
Key points to support ratings
2023H1 performance fell 49.75% year on year: the company released its 2023 annual report and achieved revenue of 7.035 billion yuan, an increase of 3.82% year on year; realized net profit of 148 million yuan, a year-on-year decrease of 49.75%; achieved net profit of 107 million yuan deducted from non-net profit, a year-on-year decrease of 60.41%. 2023Q2 achieved net profit of 75 million yuan, a year-on-year decrease of 59.33% and a year-on-year increase of 1.03%.
Fan sales continued to grow, and profitability declined: 2023H1's wind turbine sales business achieved revenue of 6.35 billion yuan, a year-on-year decrease of 2.67%; a year-on-year sales capacity of 3.40 GW, an increase of 34.96% over the previous year. Affected by increased competition in the wind power industry and the rapid decline in fan prices, the average fan delivery unit price fell 27.88% year on year to 1,870 yuan/kW, driving the sector's gross margin to drop 2.58 percentage points to 15.86% year on year. In order to cope with price pressure, the company's large-scale process continues to advance. The sales capacity of 2023H1's 2MW-4MW and 4MW-6MW models decreased by 89.25% and increased by 113.35%, respectively, and the 6MW and above models sold 1.58 GW, accounting for 46.44% of the total sales capacity.
Fan orders are sufficient, and internationalization is progressing rapidly: As of June 2023, the company's current orders totaled 22.98 GW, an increase of 62.51% over the same period last year, of which models with 6 MW and above accounted for 45.09%.
The company added 9.38 GW of new orders in the first half of the year, including 1.05 GW of overseas orders, an increase of 412.73% over the previous year. Internationalization progressed rapidly. The company's new orders and on-hand orders have reached record highs, and the development of the “Two Seas” market has achieved further success. In the future, with the rapid expansion of the company's overseas markets, overseas orders are expected to become a growth point for the company's performance.
Actively expanding new business, EPC business is growing rapidly: The company actively lays out many new businesses such as energy storage, EPC, new energy digital business, and grid-connected business. In terms of energy storage business, for the first time, the company won an external energy storage order, and Guodian Xiangshan 1 #海上风电场（二期）工程配套储能系统；EPC业务快速增长，2023H1's EPC business achieved revenue of 431 million yuan, which is comparable to the revenue for the full year of last year.
valuations
Under current share capital, based on the company's interim report and industry demand, we adjusted the company's earnings per share forecast for 2023-2025 to 0.98/1.27/1.62 yuan (the original forecast for 2023-2025 was 1.05/1.28/1.76 yuan), corresponding to a price-earnings ratio of 11.6/9.0/7.0 times; maintaining the shareholding increase rating.
The main risks faced by ratings
Price competition exceeded expectations; raw material prices were higher than expected; industrial policy risks; large-scale cost reductions did not meet expectations; demand for wind power fell short of expectations; overseas development fell short of expectations.