Event: The company released its three-quarter report for 2023. The first three quarters achieved revenue of 8.59 billion yuan, +8.8% year-on-year, net profit of 930 million yuan, +40.4% year-on-year; of these, Q3 alone achieved revenue of 2.97 billion yuan, +3.5% year-on-year, and net profit of 120 million yuan, or -54.1% year-on-year.
Fuel costs have declined, and the performance of cogeneration power plants has improved. As of September 30, the total installed capacity of the company's grid-connected operations was 2,922 MW, of which 1,77MW of combustion engine cogeneration, 257 MW of coal-fired cogeneration, 744 MW of wind power, and 116 MW of waste-to-energy; in the first three quarters, the company completed settlement of 9.575 million tons of steam, -9.9% year-on-year; completed settlement of 7.09 billion kilowatt-hours of electricity, -4.5%; completed garbage disposal volume of 1.67 million tons, +7.9% year-on-year; the company fully released profit through technological transformation and optimized operation. Production capacity, maximizing efficiency.
The asset structure has been continuously optimized, and the gross margin has increased slightly. In the first three quarters, the company actively adjusted its financing structure and channels, reduced financing costs, and achieved a gross margin of 17.51%, +0.08pp, and a net profit margin of 11.24%, +2.66pp. The expense ratio for the first three quarters decreased by 1.21pp to 12.67% yoy, the financial expense ratio decreased by 2.91pp yoy, and the sales expense ratio and management expense ratio increased by 0.27pp/1.43pp, respectively.
Entering the field of liquid-cooled super fast charging, the first domestic energy computing center was officially put into operation. By the end of the reporting period, the company and the Zhengzhou Municipal Government had cooperated in fields such as the “city of overcharging” to build an integrated application for photovoltaic storage and charging in Henan Province. In addition, the company plans to build and operate 50 fully liquid-cooled supercharging stations in the Yangtze River Delta and Greater Bay Area within 3 years; in terms of intelligent computing center business, GCL's Suzhou Xiangcheng project was officially put into operation on August 27. It is the first energy computing center in China. The company actively cooperates with domestic computing power service providers to enrich the industrial chain control capabilities of upstream and downstream ecosystems and ensure the stable and orderly development of the intelligent computing center business.
Profit forecasts and investment advice. Net profit for 2023-2025 is estimated to be 1.35 billion yuan, 1.84 billion yuan, and 2.47 billion yuan respectively, corresponding to dynamic PE 14.0 times, 10.3 times, and 7.7 times, respectively, maintaining the “buy” rating.
Risk warning: Risks such as station ratios not meeting standards, project production falling short of expectations, and large fluctuations in raw material prices.