Guotai Junan Securities·2024-04-29 05:02Investment Rating - The report maintains a "Buy" rating for Longyuan Power, with a target price of 21.50 CNY, while the current price is 17.93 CNY [4][9]. Core Views - The company's 1Q24 performance is primarily driven by increased investment income, despite short-term pressure on wind power. The long-term growth potential remains significant due to a rich reserve of renewable energy projects [2][3]. Summary by Sections Financial Performance - In 1Q24, Longyuan Power reported revenue of 9.88 billion CNY, a year-on-year increase of 0.1%, and a net profit attributable to shareholders of 2.39 billion CNY, up 2.5% year-on-year, aligning with expectations [2]. - The company added 562,000 kW of new installed capacity in 1Q24, with wind power and photovoltaic contributions of 260,000 kW and 536,000 kW, respectively. The total power generation reached 21.2 billion kWh, reflecting an 8.3% increase year-on-year [2]. - The gross profit margin for 1Q24 was 39.9%, a slight decrease of 0.1 percentage points year-on-year, while net profit was 2.66 billion CNY, up 1.2% year-on-year [2]. Wind Power Outlook - Wind power generation in 1Q24 was 17 billion kWh, a year-on-year increase of 1.4%. The low growth in wind power generation is attributed to decreased wind speeds, with utilization hours dropping by 14 hours year-on-year to 640 hours [2]. - Wind power revenue for 1Q24 was 7.88 billion CNY, down 4.7% year-on-year, likely due to increased market transaction ratios and declining wind power prices [2]. - The company anticipates improvements in wind power capacity and utilization hours as the "large replaces small" initiative progresses, alongside a substantial project reserve of 54 GW added in 2023 and 23 GW of development indicators obtained [2]. Financial Projections - The report maintains EPS estimates for 2024, 2025, and 2026 at 0.95 CNY, 1.13 CNY, and 1.28 CNY, respectively [2][3]. - Revenue projections for 2024, 2025, and 2026 are 41.609 billion CNY, 46.826 billion CNY, and 50.644 billion CNY, reflecting growth rates of 11%, 13%, and 8%, respectively [3][10]. Valuation Metrics - The report indicates a PE ratio of 18.81 for 2024, decreasing to 14.03 by 2026, suggesting an improving valuation outlook [3][10]. - The company’s net asset return (ROE) is projected to rise from 10.4% in 2024 to 11.6% in 2026, indicating enhanced profitability [3].