Event: the company released a report for the third quarter of 2020, with total operating income of 82.532 billion yuan in the first three quarters, an increase of 9.72% over the same period last year, a net profit of 2.345 billion yuan, an increase of 6.02% over the same period last year, and a net profit of 1.836 billion yuan, up 21.62% over the same period last year. The performance in the third quarter improved steadily, in line with basic expectations.
Basic EPS 0.15 yuan, weighted average ROE 3.70%.
Revenue grew rapidly in the third quarter, and the performance was in line with expectations.
The revenue in the third quarter was 29.295 billion yuan, up 31.59% from the same period last year; the net profit returned to the mother was 823 million yuan, an increase of 125.24% over the same period last year. We believe that this is due to the substantial increase in revenue in the company's energy equipment, industrial equipment and integrated services sectors in one quarter, while the four expenses in the third quarter alone totaled 3.991 billion yuan, with an expense rate of 13.58%, down 0.58% from the same period last year.
The operating cash flow is positive, and the company has full orders on hand.
The inventory in the first three quarters was 36.572 billion yuan, up 35% from the beginning of the period, mainly due to the production preparation of subordinate enterprises for new orders and unfinished projects. At the same time, the net cash flow generated by operating activities in the third quarter changed from negative to positive, reaching 3.168 billion yuan. We believe that in the field of wind power equipment business, the rush installation logic of the wind power industry remains unchanged. As a leading wind power integrator on the road and a leading enterprise of offshore wind turbines, the number of orders is expected to continue to increase, promoting profitability to continue to improve.
Nantong Energy Storage Base reaches production capacity and actively conforms to the general trend of energy reform.
According to the company's website, on September 29, 2020, the production ceremony of Shanghai Electric Guoxuan New Energy Technology (Nantong) Co., Ltd. was held in Nantong Economic and technological Development Zone. Electric Guoxuan Nantong Base is located in Nantong Economic Development Zone, with a total construction area of 200000 square meters. The first phase of the project is 5GWh, planning and construction 10GWh. In the meantime, the company signed strategic cooperation agreements and energy storage joint venture intention agreements with State Grid Integrated Energy Service Group Co., Ltd., China Energy Construction Group Anhui Electric Power Design Institute Co., Ltd., Shenzhen Zhongxing Kangxun Electronics Co., Ltd., Shenneng Nanjing Energy holding Co., Ltd., and Pinggao Group Energy Storage Technology Co., Ltd., respectively, take the initiative to comply with the general trend of energy change and actively layout the energy storage market.
Profit forecast
Due to the company's active layout of the energy storage market, the expansion of production capacity and the optimization of product structure, we have raised our business income forecast for 2020-2022 from 1541.28, 1682.25 and 173.373 billion yuan to 1541.33, 1791.49 and 202.904 billion yuan, up 20.88%, 16.23% and 13.26% over the same period last year. The net profit of homing was raised from 36.78,40.82 and 4.533 billion yuan to 39.12,44.86 and 5.023 billion yuan, up 11.75%, 14.66% and 11.97% over the same period last year; the corresponding EPS was 0.26,0.30,0.33 yuan respectively, and the corresponding PE was 19.95,17.40,15.54 times, maintaining the "overweight" rating.
Risk hint: overseas business dispute risk; wind power installation is not as expected; exchange rate fluctuation risk