Incident: The company released its 2023 annual report. In 2023, it achieved revenue of 4.813 billion yuan, a year-on-year increase of 53.93%; achieved net profit due to mother of 292 million yuan, an increase of 6.37%; net profit after deducting non-return to mother was 255 million yuan, an increase of 31.27% over the previous year; in 2023, the company plans to distribute a discovery dividend of 0.5 yuan (tax included) for every 10 shares to all shareholders.
The company also released its 2024 quarterly report. 2024Q1 achieved revenue of 657 million yuan, a year-on-year decrease of 18.38%; realized net profit of 55 million yuan, a year-on-year decrease of 39.69% and a decrease of 2.90% year-on-year.
In '23, the company's Hailufeng business developed well, and the gross margin of Lufeng's overseas business was impressive. 1) Land wind: The domestic market is developing well. The company effectively released the production capacity of the land wind business through capacity planning and layout integration. In 2023, land wind equipment (steel tower) shipments increased by 39.80% year-on-year to 439,400 tons; at the same time, the company entered a concrete tower track, bringing an increase to the land wind equipment business. In 2023, the company's revenue for land wind equipment (including concrete towers) increased 31.08% year on year to 3.494 billion yuan, and gross margin increased 1.65 pct year on year to 19.98%; of these, overseas revenue was 1,294 billion yuan, gross margin was about 29.09%, and profitability was strong. 2) Sea Breeze: The domestic sea breeze market picked up in 2023. The company's shipping volume of sea breeze and offshore equipment increased 120.34% year on year to 128,500 tons, revenue increased 173.31% year on year to 1,080 billion yuan, and gross margin decreased 8.73 pct year on year to 10.07% year on year.
Based on the domestic land wind market, we actively explore domestic sea wind and international markets. 1) Domestic land wind: The company plans to add steel towers and mixed tower production capacity in the region close to the main domestic onshore wind power market; 2) Domestic Sea Wind: the company continues to promote the layout of offshore wind power manufacturing bases in South China; 3) Overseas: The company's Yangzhou Taisheng production base (annual production capacity 250,000 tons) for export products has been completed and put into operation in 2023, and has obtained audits and certifications from some customers; at the same time, the company expects to complete the technical reform of the Taisheng Blue Island base within 2024, which can further meet the requirements of export products; in addition, the company expects to complete the establishment of a European company in 2024 to further meet the requirements of export products. positive Respond to overseas customer needs. By the end of 2023, the company's maximum annual production capacity for wind power towers and offshore products can reach 1 million tons, which provides sufficient production capacity guarantee for future market development.
The 24-year production target shows confidence in growth, and abundant orders on hand guarantee performance growth. Affected by delays in delivery of some ocean wind projects and rising production capacity at the Yangzhou base, the company's wind power and offshore equipment output in 2023 fell short of expectations, about 591,600 tons. The company aims to achieve a total output of 800,000 tons (including concrete towers) in the wind power and offshore equipment manufacturing business by 2024, showing confidence in growth. As the company's production capacity continues to be released, compounded by rising demand for wind power at home and abroad, the company's current orders are abundant, and the company's performance has strong growth momentum.
Maintaining a “buy” rating: Considering that the 24Q1 wind power off-season may be under pressure, and that it will affect the company's annual performance, and based on prudential principles, we lowered the 24/25 year and added a 26-year profit forecast. The company is expected to achieve net profit of 5.56/7.37/ 910 billion yuan in 24-26 years (13% down/10% down/increase). The corresponding EPS is 0.59/0.79/0.97 yuan, respectively. The current stock price corresponding to 24-26 PE is 13/10/8, respectively times. The company is deeply involved in wind power equipment manufacturing. In recent years, it has focused on developing the “Sea Breeze+ Overseas” market with higher growth potential. It is optimistic that future performance will continue to grow, and maintains a “buy” rating.
Risk warning: risk of changes in industry policies; risk of fluctuations in raw material prices; risk of falling short of expectations when going overseas.