Incident: The company released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved revenue of 26.485 billion yuan, up 11.23% year on year (after adjustment), net profit of 7.181 billion yuan, up 0.94% year on year (adjusted); 2024Q1 achieved revenue of 7.899 billion yuan, up 15.26% year on year (adjusted), and net profit of 2,422 billion yuan (adjusted) year on year.

The installed scale has increased steadily, and operating income continues to grow. In 2023, the company added 13.5 GW of installed capacity, and the total installed capacity exceeded 40 GW, including 3.4944 million kilowatts of wind power, 9.5402 million kilowatts of solar energy, and 5010,000 kilowatts of independent energy storage. The company's revenue increased 11.23% year-on-year (adjusted) in 2023, mainly due to the company's new projects being put into operation and generating electricity in 2023. The power generation volume increased compared to the same period of the previous year; net profit to mother increased by 0.94% year-on-year (after adjustment), which was lower than the revenue growth rate, mainly due to:

(1) New grid-connected projects in 2022 were put into operation one after another in 2023, and depreciation and operating costs increased; (2) power generation companies began charging production safety costs in December 2022, with a net year-on-year increase in operating costs; (3) The profit level of participating companies fluctuated, and investment income decreased by 47.48% year on year.

24Q1 revenue grew steadily, and net profit to mother remained basically the same. 2024Q1 achieved operating revenue of 7.899 billion yuan, an increase of 15.26% over the previous year. The main reasons are: (1) the company's new grid-connected wind power and photovoltaic units increased, and feed-in power and revenue increased; (2) the company's wind power (land wind, sea wind) and photovoltaic project resources were better than in the same period last year. In 2024 Q1, the company's net profit to mother was 2,422 billion yuan, up 0.10% year on year. The main reasons: the number of new wind power and photovoltaic units put into operation by the company increased, trial operation revenue increased year on year, depreciation and operating costs increased year on year, and profit and loss attributable to minority shareholders increased.

The reserve project is sufficient to support the steady development of the company. By the end of 2023, the planned installed capacity of the company's wind power projects was 5.8567 million kilowatts, and the planned installed capacity of the new approved/filed project was 7.2418 million kilowatts; the planned installed capacity of the solar power generation project was 124.13 million kilowatts; the planned installed capacity of the new approved/filed project was 14.925,500 kilowatts; the planned installed capacity of the additional approved/filed project was 2.6 million kilowatts; the planned installed capacity of the additional approved/filed project was 1,7318 million kilowatts. We believe that the company has sufficient projects under construction and approval, which will support the company's steady development in the future.

Investment advice and valuation: We adjusted the company's profit forecast based on the company's actual business situation. We expect the company's revenue for 2024-2026 to be 32.441 billion yuan, 39.04 billion yuan, and 46.229 billion yuan respectively, with growth rates of 22.5%, 20.3% and 18.4% respectively, and net profit to mother of 8.429 billion yuan, 10.1 billion yuan, and 11.783 billion yuan respectively, with growth rates of 17.4%, 19.8% and 16.7% respectively.

Risk warning: Scenery construction falls short of expectations; risk of electricity price fluctuations; risk of falling utilization hours.