Core views
2023Q1 achieved revenue of 10.342 billion yuan, an increase of 23.39% over the previous year; achieved net profit of 335 million yuan, an increase of 230.64% over the previous year; and realized net profit after deduction of the mother was 316 million yuan, an increase of 3962% over the previous year. 2023Q1, the company's coal, gas, wind power, and photovoltaic power generation capacity were 12.654 billion kilowatt-hours, 1,504 billion kilowatt-hours, 2.48 billion kilowatt-hours, and 1.13 billion kilowatt-hours, respectively, up 24.72%, 12.54%, 18.34%, and 17.84%, respectively. Electricity growth was the core factor in improving the company's revenue and performance. The 23Q1 company confirmed investment income of 124 million, a year-on-year decrease of 161 million, and asset disposal income of 0.7 million yuan, a year-on-year decrease of 92 million. These two dragged down the company's performance growth to a certain extent.
occurrences
The company released the first quarter report of 2023
The company achieved revenue of 10.342 billion yuan in the first quarter of 2023, an increase of 23.39% over the previous year; realized net profit of 335 million yuan, an increase of 230.64% over the previous year; and realized net profit after deducting non-return to the mother was 316 million yuan, an increase of 3962% over the previous year.
Brief review
The increase in electricity capacity in Turkey combined with continued growth in clean energy electricity capacity boosted the company's performance in 2023Q1. The company's coal-fired power generation capacity was 12.654 billion kilowatt-hours, up 24.72% year-on-year, mainly due to the consolidated commissioning of Turkey's Hunutlu project in the second half of '22. The company's gas, wind power, and photovoltaics generated 1,504 billion, 2.48 billion and 1.13 billion kilowatt-hours respectively, with year-on-year growth rates of 12.54%, 18.34%, and 17.84%, respectively. The increase in electricity capacity is the core factor in improving the company's revenue and performance. Turkey's Hunutlu coal-fired power plant controlled by the company is the largest coal-fired power project invested by a Chinese power company in Turkey. It has an installed capacity of 1.32 million kilowatts and an average annual power generation capacity of about 90-10 billion kilowatts of electricity. A severe earthquake occurred in Turkey in February 23. The Hunutlu power plant maintained relatively stable operation even when the surrounding power plants were out of operation, and no major asset damage was suffered.
Overall expenses improved during the period. Investment income and asset disposal income declined year-on-year. In 2023Q1, the company's management expenses, R&D expenses and financial expenses were 327 million, 23 million, and 821 million, respectively. The year-on-year changes were 63 million, 01 million, and 119 million yuan. The overall period expenses decreased 55 million over the same period, and the results of cost reduction and efficiency were remarkable. In 23Q1, the company confirmed investment income of 124 million, a year-on-year decrease of 161 million; asset disposal income of 0.07 million, a year-on-year decrease of 902 million; investment income and asset disposal income declined year-on-year, which dragged down the company's performance growth to a certain extent.
Thermal power and green power are making concerted efforts to maintain the “buy” rating
In 2023, the company will accelerate the construction of new energy sources, and the operating goal is to start producing 6.8 GW of green power throughout the year (including mergers and acquisitions). With improved profitability in the thermal power business and continued growth in the scale of new energy installations, we expect the company's performance to continue to grow. We expect the company's net profit to be 2.29 billion yuan, 3.26 billion yuan, and 3.77 billion yuan respectively, and net profit attributable to common shareholders of 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, maintaining the “buy” rating.
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.