Tai Ping Yang·2024-07-29 04:00Investment Rating - The report initiates coverage with a "Buy" rating for the company [3][59]. Core Viewpoints - The company is backed by the State Energy Group, which is expected to continuously inject wind power assets, leading to sustained high growth in installed capacity [3][12]. - The acceleration of green certificate trading policies is anticipated to enhance the unit revenue through increased green premiums [3][37]. - The company is projected to achieve significant revenue and profit growth over the next three years, with expected revenues of CNY 399.29 billion, CNY 451.75 billion, and CNY 495.70 billion for 2024, 2025, and 2026 respectively [3][59]. Summary by Sections 1. Company Overview - The company is a leading player in wind power, having developed over 10GW of wind power capacity since 2012. It has a strong background in self-development, construction, and operation of renewable energy projects [9][14]. - The company’s controlling shareholder, the State Energy Group, has committed to injecting wind power assets, which will enhance the company's asset base [12][14]. 2. Market Dynamics - The market for renewable energy is shifting towards increased market-based trading, with a significant portion of renewable energy expected to participate in market transactions [33][37]. - The average on-grid electricity price for wind power is under pressure due to the increase in market-based trading and the rise of parity projects [33][37]. 3. Financial Projections - The company’s revenue is expected to grow at rates of 6.08%, 13.14%, and 9.51% for the years 2024, 2025, and 2026 respectively, with net profits projected to grow by 20.46%, 11.64%, and 7.80% in the same years [3][59]. - The earnings per share (EPS) are forecasted to be CNY 0.90, CNY 1.01, and CNY 1.08 for 2024, 2025, and 2026 respectively, with corresponding price-to-earnings (PE) ratios of 19.40, 17.38, and 16.12 [3][59]. 4. Operational Efficiency - The company has a competitive edge in wind power utilization hours, with an average of 640 hours compared to the industry average of 596 hours [44]. - The company plans to enhance its operational efficiency by upgrading older wind turbines, which will reduce operational costs and increase capacity [44][45]. 5. Renewable Energy Growth - The company’s installed capacity is expected to grow significantly, with projections of 9.5GW, 11.5GW, and 13.5GW of new installations for 2024, 2025, and 2026 respectively [59]. - The company’s solar power segment is also expected to see high growth, with new installations projected to reach 4-5GW in 2024 [49].