Riyue HI(SH:603218) Great Wall Securities·2024-05-07 11:02Investment Rating - The report maintains a "Buy" rating for the company, expecting a price increase of over 15% relative to the industry index within the next six months [27]. Core Views - The company is experiencing revenue pressure due to declining domestic wind turbine bidding prices and a decrease in installation volumes starting from the second half of 2023. However, the net profit attributable to the parent company has significantly increased due to effective cost control and improvements in gross margins [2][4]. - The company is expanding its production capacity in casting and precision machining, which is expected to enhance its market competitiveness and profitability [5][11]. - The wind power industry is benefiting leading enterprises, with the company positioned to gain from the changing competitive landscape and increased global wind power installations [6][11]. Financial Performance Summary - In 2023, the company reported revenue of 4.656 billion yuan, a decrease of 4.3% year-on-year, while the net profit attributable to the parent company was 482 million yuan, an increase of 39.84% year-on-year [4][11]. - The company’s revenue is projected to grow to 5.585 billion yuan in 2024, with a year-on-year growth rate of 20%, and net profit is expected to reach 651 million yuan, reflecting a growth rate of 35.11% [4][11]. - The gross margins for domestic and foreign sales improved to 15.65% and 34.43%, respectively, with year-on-year increases of 4.53 percentage points and 11.39 percentage points [2][4]. Production Capacity and Market Position - The company has established a casting capacity of 700,000 tons and is expanding its precision machining capacity, which is expected to reach 540,000 tons [5][11]. - The company is actively involved in the design and development of large-scale wind power products, successfully breaking foreign monopolies in certain technologies, which is anticipated to enhance profit margins significantly [10][11]. Future Outlook - The company is expected to see a recovery in shipments in Q2 2024, with a projected revenue of 5.585 billion yuan in 2024, followed by 6.512 billion yuan in 2025 and 7.533 billion yuan in 2026 [11]. - The report anticipates that the company will maintain a competitive edge due to its production capacity and management capabilities, benefiting from the industry's consolidation trends [6][11].