Incident: In 2023, the company achieved operating income of 10.144 billion yuan, a year-on-year decrease of 7.37% (after adjustment, same below); realized net profit to mother of 909 million yuan, an increase of 32.87% over the previous year. With 2024Q1, the company achieved operating income of 2,414 billion yuan, a year-on-year decrease of 11.09% (after adjustment, same below); realized net profit of 188 million yuan, a year-on-year decrease of 39.58%.
The basic market of the main business is relatively stable, and the first quarter results are under pressure in the short term
The main factors for the company's profit growth in 2023 are: first, obtaining income from related equity disposal and debt settlement; second, the year-on-year decline in fuel prices such as natural gas and coal. The gross margins of electricity sales and steam sales were 23.98% and 12.82%, respectively, up 8.89 and 4.17 pcts, respectively. The increase in gross margin offset the year-on-year decline in some power generation; third, a sharp increase in wind power revenue and profit; and fourth, a decrease in financing costs.
In the first quarter of 2024, the company continued to build a digital energy business based on “source network storage” linkage and integrated “optical storage and charging”, and continued to increase team and channel construction in the new business layout. R&D expenses increased 121.6% year on year. Combined with the decline in equity disposal income and debt settlement income in the current period, the investment income decreased by 67.5% year on year, causing short-term pressure on the company's performance.
Increase the proportion of new energy installed, further optimize the source-side asset structure of the multi-faceted integrated “optical storage and charging” business, and continuously increase the proportion of renewable energy installed. In 2023, the company transferred shares in the 800MW combustion engine power generation project to increase the development of photovoltaic and wind power new energy projects, acquire photovoltaic assets, and promote household and commercial distributed photovoltaic business. 2023A and 2024Q1 added 668.02 and 5.4626 million kilowatts of photovoltaics, respectively, and the 2024Q1 added 739,500 kilowatts of wind power, respectively. In the energy storage business, 2023A completed 4.5GW/9 GWh of independent energy storage filing projects, added 1.8 GW/3.6 GWh of independent energy storage filing projects, added 0.95 GW/1.9 GWh of independent energy storage; the Jiande pumped energy storage plant (2.4 million kilowatts) is under construction. 2024Q1
User-side energy applications, multi-line parallel development of integrated energy services, and collaborative development of energy+computing power. In terms of charging business, as of 2024Q1, the company had invested in the construction of 932 DC piles (60 kW/gun equivalent) and built an optical storage overcharging demonstration station with a total installed capacity of 2,152 kW. The supercharged charging piles used full liquid cooling and overcharging technology; in terms of power exchange business, 71 power exchange stations were operated, including 54 passenger stations and 17 commercial stations.
While continuing to promote traditional integrated energy services, the company is vigorously promoting the deep integration of intelligent computing and energy. The 2024Q1 successfully launched more than 1,000 P of computing power resources. It is expected to complete a scale of 3000-5000P in the first half of the year, and priority will be given to construction and operation in Beijing, Shenzhen and other places in the future.
Investment advice: The company's traditional energy business is growing steadily, and the share of renewable energy is still the main component of the company's operating income; new business development is still in the early stages of scale expansion. Based on the company's technology accumulation and large project reserves in new business fields, it is expected to become the second curve of the company's development in the next few years.
We expect the company to achieve operating income of 125.64, 142.65 and 16.231 billion yuan respectively in 2024-2026, with year-on-year increases of 23.9%, 13.5%, and 13.8%; net profit to mother will be 12.47, 14.98, and 1,731 billion yuan, respectively, up 37.2%, 20.1%, and 15.6% year-on-year. The corresponding EPS was 0.77, 0.92, 1.07 yuan, and PE was 11.5, 9.6, and 8.3 times, maintaining the “gain” rating.
Risk warning: macroeconomic downside risk; risk of mobile energy business expansion falling short of expectations; risk of falling gross margin due to continued rise in fuel prices; risk of falling short of expectations in clean energy project construction; risk of government approval.