CECWPC(601016) 华泰证券·2024-12-18 01:30Investment Rating and Target Price - The report maintains an "Overweight" rating for the company with a target price of RMB 3.81, based on a 1.3x PB for 2025 [1] - The target price is revised upward from RMB 3.5, reflecting improved profitability expectations [5] Core Investment Thesis - The company is a leading wind power operator with potential for asset quality improvement [1] - Key advantages include declining curtailment rates, stable wind power tariffs, and reduced subsidy-related impairment risks [1] - Catalysts for revaluation include favorable tariff policies, growth in installed capacity, and resolution of subsidy issues [1] Wind Power Operations and Market Position - As of September 2024, the company's cumulative/equity/operational installed capacity is 6.07/5.83/5.94 GW, accounting for 1.24% of the national market share [2] - The company ranks among the top second-tier players in the wind power market [2] - Non-curtailment regions account for an increasing share of installed capacity, helping to control curtailment rates [2] Financial Performance and Projections - The company's wind power generation is expected to grow by 9.7%/8.7%/7.4% YoY from 2024 to 2026 [2] - Average on-grid tariffs are projected to decline slightly to RMB 465/456/446 per MWh from 2024 to 2026 [2] - Net profit attributable to shareholders is forecasted to be RMB 1.618/1.719/1.835 billion for 2024-2026, with a CAGR of 6.7% [5] Subsidy and Cash Flow Outlook - Subsidy receivables show signs of peaking, with the ratio to net assets declining to 40.3% as of September 2024 [3] - Operating cash flow in 9M24 increased by 6% YoY to RMB 2.55 billion, with 3Q24 up 17% YoY to RMB 1.0 billion [3] - The company is expected to benefit from accelerated subsidy repayments, improving cash flow quality and reducing impairment risks [3] Market Concerns and Counterpoints - Market concerns about declining profitability due to high new installations are mitigated by the company's focus on project quality over scale [4] - The company's wind power profit margins are expected to remain stable, with reduced impairment risks from increasing subsidy repayments [4] Industry Context and Competitive Positioning - The company has a diversified regional presence, reducing curtailment risks and enhancing growth prospects [2] - Wind power tariffs are expected to remain relatively stable despite increasing marketization, supported by structural differences in regional pricing [2] - The company's market share and operational scale position it well within the second tier of wind power operators [2] Valuation and Profitability - The company's 2024-2026 net profit CAGR of 6.7% is below the industry average of 17.6%, but it faces lower risks of margin compression [5] - The target price of RMB 3.81 is based on a 1.3x PB for 2025, reflecting upward revisions to profitability forecasts [5]