Core views
In 2022, the company achieved revenue of 39.161 billion yuan, an increase of 27.00% over the previous year. In 2022, the company's performance turned loss into profit, achieving net profit of 321 million yuan, an increase of 2,157 million yuan over the previous year; achieving net profit of 38 million yuan deducted from the mother, an increase of 1,948 million yuan over last year. The company's installed capacity continues to grow. The company added 1,862,200 kilowatts of installed capacity in 2022, of which the installed capacity of coal, photovoltaics and wind power was 132, 44.75, and 85,700 kilowatts, respectively. Meanwhile, the company's average feed-in tariff in 2022 was 549 yuan/MWH, an increase of 21.73% over 2021. With improved profitability in the thermal power business, continued growth in new energy installations, and rapid development of the emerging technology industry, we expect the company's performance to continue to grow.
occurrences
The company released its 2022 annual report
In 2022, the company achieved operating income of 39.161 billion yuan, an increase of 27.00% over the previous year; net profit of 321 million yuan, an increase of 2,157 million yuan over the previous year; realized net profit of 138 million yuan, an increase of 1,948 million yuan over last year; achieved net income of 0.068 yuan per share, an increase of 0.77 yuan/share over last year; and achieved a weighted average return on net assets of 1.22%, an increase of 13.96 percentage points over last year.
Brief review
The company's profit returned to the parent turned a loss into a profit, and operating inflows have now increased dramatically
In 2022, the company achieved revenue of 39.161 billion yuan, an increase of 27.00% over the previous year, mainly due to the year-on-year increase in the company's new energy installed capacity and the year-on-year increase in power generation, which was compounded by the launch of Turkey's Hunutlu coal-fired power plant project. In 2022, the company's performance turned a loss into a profit, achieving net profit of 321 million yuan, an increase of 2,157 million yuan over the previous year; the net profit returned to the mother was 138 million yuan, an increase of 1,948 million yuan over last year. The company's power generation business achieved revenue of 33.472 billion yuan, of which thermal power, wind power and photovoltaics achieved revenue of 237.56, 55.47 and 4.170 billion yuan respectively, up 39.25%, 3.88% and 25.24% over the previous year.
In terms of expenses, the company's management expense ratio, R&D expense ratio and financial expense ratio in 2022 were 4.36%, 0.50%, and 9.88%, respectively, down 1.38, 0.1 and 0.76 percentage points from the previous year. The year-on-year improvement in the company's expenses rate was mainly due to the fact that the company's expense management and control results were better.
In 2022, the net cash flow generated by the company's operating activities was 12.142 billion yuan, an increase of 690.52% over the previous year. This was mainly due to the operation of Turkish coal power projects and the commissioning of new wind power projects, which led to a year-on-year increase in revenue from the power generation business.
The installed scale continues to grow, and the amount of feed-in electricity increased year-on-year
In 2022, the company added 1,8622 million kilowatts of installed capacity, including 132, 44.75, and 85,700 kilowatts of coal, photovoltaics and wind power, respectively. By the end of 2022, the company's holding installed capacity was 209.15,300 kilowatts, of which the installed scales of coal, gas, wind power and photovoltaics were 984.80, 287.52, 388.41 and 4.308 million kilowatts respectively, and the installed capacity of new energy reached 8.1921 million kilowatts, accounting for 39.17% of the total installed capacity. In 2022, the company approved a total of 3,011 million kilowatts of projects, namely 100,000 kilowatts of wind power installed and 2.9011 million kilowatts of photovoltaic installations, respectively, and 1.2010 million kilowatts of installed projects under construction.
In 2023, the company will ensure that domestic new energy installed capacity will be approved for 7.9 million kilowatts and 6.8 million kilowatts of production; it will strive to achieve 11 million kilowatts of new energy installed capacity and put into operation 10 million kilowatts of new energy; and additional installed capacity of about 1 million kilowatts overseas. With the gradual implementation of the company's new energy projects, the company's share of clean energy will continue to increase. In terms of feed-in electricity capacity, the company achieved 60.916 billion kilowatt-hours of feed-in power in 2022, an increase of 7.57% over the previous year, mainly due to the increase in the company's installed capacity. By type, the company's thermal power, wind power and photovoltaic feed-in electricity capacity were 471.46, 87.16, and 5.054 billion kilowatt-hours, respectively, up 4.95%, 12.13%, and 28.36% over the previous year. Looking at 202Q4 alone, the company achieved feed-in electricity capacity of 16.491 billion kilowatt-hours, an increase of 17.62% over the previous year; among them, the Turkish power plant achieved 2,527 million kilowatt-hours of feed-in power. In terms of heating, the company sold 19.119,800 gigajoules of heat in 2022, a decrease of 2.21% over the previous year. In terms of fuel costs, the company's fuel cost in 2022 was 19.055 billion yuan, an increase of 25.43% over the previous year; the unit price of consolidated tax-inclusive coal discounted coal was 1461.32 yuan/ton, an increase of 17.86% over the previous year, mainly due to the fact that electricity and coal prices remained high.
Feed-in electricity prices increased year-on-year, and the proportion of market transactions increased
In terms of feed-in tariffs, the average feed-in price of each power plant operated by the company in 2022 was 549 yuan/MWH, an increase of 21.73% over 2021. In terms of the number of hours used, the average number of hours used by the company's generator sets was 3,230 hours, a decrease of 245 hours over the previous year. Among them, the number of hours used for coal, gas, wind power, and photovoltaics was 4732, 2409, 2335, and 1,278 hours, respectively, down 117, 131, 303 and 2 hours from the previous year. In terms of plant electricity consumption, the electricity consumption rate of the company's integrated plant in 2022 was 4.18%, down 0.01 percentage points from the previous year. In 2022, the company's market-traded electricity volume was 417.56 kilowatt-hours, an increase of 62.83% over the previous year, accounting for 68.55% of the total feed-in electricity volume, an increase of 23.27 percentage points over the previous year.
Turkish power plants contributed profits, and emerging industries developed rapidly. Maintaining the “buy” rating, Turkish power plants achieved a feed-in capacity of 3,967 billion kilowatt-hours in 2022, with an average feed-in price of 959 yuan/MWH, mainly due to high electricity prices in the Turkish market in 2022; contributed 3,980 billion yuan in revenue, and gross margin reached 27.08%. Considering that Turkey's power plant was put into operation in 2022, there is room for further growth in its feed-in capacity in 2023. With the smooth operation of the Turkish power plant, we expect the project to continue to contribute profits to the company. In terms of the domestic thermal power business, the overall downward trend in coal prices in 2023 will help the company improve coal costs and recover profits in the thermal power business. In addition to the traditional electricity and thermal power business, the company is currently actively developing new industries such as integrated smart energy. Through the integration of emerging industries and traditional industries, the company has successively put into operation projects such as the Shanghai West Coast Energy Center Project, the World Expo Energy Center Project, and the Dayou Wind Storage Project, and is promoting projects such as SIPG's zero-carbon driverless power-exchange heavy truck and the Carrefour parking lot charging station on Shuicheng South Road in an orderly manner. With improved profitability in the thermal power business, continued growth in the scale of new energy installations, and rapid development of the emerging technology industry, we expect the company's performance to continue to grow. We estimate that the company's net profit attributable to its mother from 2023 to 2025 will be 2.29 billion yuan, 3.26 billion yuan and 3.77 billion yuan respectively, and net profit attributable to common shareholders will be 2.16 billion yuan, 3.13 billion yuan and 3.64 billion yuan respectively. The corresponding EPS will be 0.77 yuan/share, 1.11 yuan/share, and 1.29 yuan/share, respectively.
Risk analysis
Coal cost risk: If prices in the domestic coal market remain high from 2021 to 2022, and the company's coal costs do not improve or rise instead, it will be difficult for the company to make a profit in 2023's thermal power business.
Risk of policy changes: The company is in the power industry, and changes in revenue conditions are affected by policy adjustments. If there is a major change in coal-fired feed-in tariffs or new energy subsidy policies, the company's electricity business may face losses.
Risk of fluctuations in overseas business: The Turkish power plant business is an important source of profit for the company. If factors such as the international environment, geopolitics, and exchange rate conditions change drastically, the profit contribution of the company's overseas business may fall short of expectations.