Maintaining the “Overweight” rating: Considering that the company's 1Q24 performance exceeded expectations, the 2024/2025/2026 EPS was raised to 1.09/1.26/1.58 yuan (previously 0.99/1.12/1.38 yuan). Maintain the target price of 16.52 yuan and maintain the “gain” rating.

Incident: The company released a performance forecast. The net profit for 1Q24 is estimated to be 340 to 370 million yuan, +91.4% to 108% year over year. The year-on-year growth rate is +17.0 to 33.9 ppts compared to 4Q23, exceeding our previous expectations.

New energy has driven explosive growth in performance, and the profitability of the project has been verified. The company's high performance in 1Q24 was mainly due to a sharp year-on-year increase in electricity sales in the new energy sector during the same period: 1) the Yongning Wind Farm and Jianshuitang Liangzi Wind Farm brought about an increase in electricity volume after being connected to the grid at full capacity; 2) Q1 was a windy season, and the incoming wind conditions improved year on year. The company disclosed a slight year-on-year increase in electricity prices in 1Q24 for new energy market-based transactions. We believe that under the tight pattern of electricity supply and demand in Yunnan Province, the company's market-based electricity prices are expected to remain relatively stable. We believe that the company's high performance in 1Q24 confirms that the profitability of the company's new wind power projects remains at a high level (we believe that the estimated yield of the company's new wind power projects is conservative; in fact, key parameters such as grid electricity prices, utilization hours, and construction costs are expected to be superior to the estimated estimated values of the project), and the company's annual performance is expected to continue to rise high.

There are plenty of reserve projects, and installed capacity is expected to continue to grow. By the end of 2023, the company had 1.6 GW of installed capacity, 2.1 GW of approved installation plan, 0.5 GW of installed capacity under construction. The construction progress of the first phase of the company's Jinzhong Wind Farm (0.35 GW) was slightly delayed due to early approval such as forest grass. We expect that the company can make up for the new 2024E installation schedule, and sufficient project reserves will lay the foundation for continued high growth.

Risk warning: Electricity demand falls short of expectations, salt and nitrate business operations fall short of expectations, etc.