Forecast 2024 profit year-on-year decrease of 7.5% The

company released the 2024 performance report: in 2024, the company will achieve revenue of 18.089 billion yuan, a year-on-year increase of 21.1%, and the net profit attributable to the parent company will be 1.857 billion yuan, a year-on-year decrease of 7.5%. Among them, 4Q24: the company achieved revenue of 9.021 billion yuan, a year-on-year increase of 21.1%, and net profit attributable to the parent company was 1.172 billion yuan, a year-on-year increase of 20.1%. The company's performance in 2024 is solid, and the express report is in line with market expectations.

In 2024, the company's shipments will show rapid growth, the profit margin of wind turbines will increase year-on-year, and the transferred power stations will continue to contribute strong profits. According to CWEA data, in 2024, the company will achieve 9.15GW of new domestic wind turbine hoisting volume, a year-on-year increase of 23.5%, higher than the growth rate of the industry's overall new hoisting volume, and the domestic market share will be 10.5%, an increase of 1.2ppt year-on-year. The gross profit margin of the company's 1-3Q24 wind turbines is higher than the level of the whole year of 2023, and we expect that the gross profit margin of the company's fans will increase year-on-year in 2024, and the profit of the fan manufacturing business will show a significant increase. In 2024, we expect the scale of the company's power plant transfer to increase year-on-year, which will continue to make a strong contribution to profitability.

Key points of concern

Domestic and overseas orders in hand are full, and there is still room for continuous cost reduction. In 2024, the company will obtain a large number of orders at home and abroad, 1-3Q24 the company signed a new order of 12GW+, 4Q24 according to the industry's public bidding situation, the company still obtained bulk domestic orders, and the company previously announced that it would obtain 1.6GW orders in India, marking the company's biggest breakthrough in the overseas market. In 2025, we expect that under the trend of full new installed capacity in the domestic industry, the company is expected to achieve high growth in shipments, and is expected to continue to increase its market share, and the export business is also expected to start in terms of revenue, laying a good foundation for high growth in overseas markets in the next 3-5 years. In terms of fan costs, although the industry has reported that there is a trend of price increases for some upstream components, we believe that the industry and companies can offset the price increases of some parts through design cost reduction, and there is still room for continuous cost reduction in general.

Earnings Forecast and Valuation

Considering that the profit margin of the company's wind turbine manufacturing business, the scale of the power plant transfer business and the profit margin are all slightly lower than previously expected, we have lowered the company's 2024 profit forecast by 14.6% to 1.862 billion yuan, lowered the company's 2025 profit forecast by 4.9% to 2.328 billion yuan, and introduced a new 2026 profit forecast of 2.742 billion yuan. The company's current share price corresponds to 14.6/12.4x P/E in 2025/2026. We continue to be optimistic about the trend of increasing the volume and profit of the company's domestic wind turbine business, and believe that the company is expected to gradually increase the volume of the export business and maintain the outperform rating. Considering the valuation switch to 2025, we maintain the company's TP of 33.92 yuan, corresponding to 17.9/15.2 times P/E in 2025/2026, which is 22.1% upside from the current share price.

Risk:

Less than expected industry demand; The competitive pressure of the wind power industry has intensified; Tempo risk of power plant sales.