Main points of investment
Event: Jingneng Electric Power released its mid-2023 report. During the reporting period, the company realized operating income of 15.007 billion yuan, year-on-year + 6.65%, net profit of 368 million yuan, year-on-year-28.49%, and non-return net profit of 353 million yuan, year-on-year-29.42%. 2023Q2, the company achieved revenue of 6.43 billion yuan, year-on-year + 3.08%, return to the mother net profit-39 million yuan. Combined with the company's operating data, our comments are as follows:
Performance comments: Q2 electricity price decline and H1 acid thorn ditch mining profit decline dragged down the second quarter results. Thanks to the commissioning of Jingning Phase II # 3 unit at the end of last year, the thermal power grid capacity of 2023H1 Company was 366.21 billion kWh, + 9.72% compared with the same period last year. However, due to the comprehensive development of the spot electric power market where the units are mainly distributed, the feed-in electricity price fluctuates, and the average electricity price of H1 is 407 yuan / MW hour, which is-1.47% compared with the same period last year; at the same time, the high inventory of coal (inventory + 85.72%) affects the performance release of Q2 thermal power. The company controls power plants Jinghai coal gangue power generation, Kangbashi thermal power generation, Jingyu power generation losses of 0.99,0.68 and 53 million yuan respectively. In addition, the company's investment income in the first half of the year fell by 183 million yuan compared with the same period last year, mainly affected by the overall decline in coal prices this year. The net profit of sour thorn ditch Mining H1 decreased by 244 million yuan compared with the same period last year.
Outlook: the unit is put into production to increase the power supply, and is optimistic about the performance release under the downward trend of coal prices. Jingning Phase 2 # 4 unit (1 × 660 MW) has been connected to the grid in April this year, Jingtai Phase 2 × 660MW is scheduled to be put into operation in August, Zhuozhou 2 × 1000MW expansion project and Qinhuangdao Thermal Power Phase II 2x660MW project are approved in February and July respectively, superimposed new energy to accelerate the development, the company's electricity is expected to grow steadily. In terms of cost, the company's fuel cost has fallen steadily. The price of standard coal entering the plant in June is 16% lower than that in January and 5% lower than that in the same period last year. Due to the obvious decline in domestic coal prices from the end of May to June, Q3 thermal power performance is expected to accelerate the release of Q2 high inventory coal. In addition, the company H1 financial expenses compared with the same period last year-19.59%, the average withdrawal rate of 2.08%, lower 0.62pct compared with the same period last year.
Investment suggestion: location advantage-the downward price of domestic coal price is expected to reduce the pressure on the cost side, the commissioning of the unit will lead to an increase in electricity, and the promised dividend rate will not be less than 70% in 2023-2025. We adjusted the company's net profit from 2023 to 2025 to 11.50,18.64 and 2.193 billion yuan, which was + 43.2%, + 62.1% and + 17.6% respectively compared with the same period last year. The PE valuation corresponding to the closing price on August 17 was 19.8x, 12.2x and 10.4x, respectively.
Risk hints: coal prices rising sharply, power trading risk, spot advance less than expected, macroeconomic fluctuations