Core ideas:
The performance of the water supply is under pressure, and the net profit of 23H1 is-52% compared with the same period last year. The company released the 23 mid-year report, 2023H1 achieved operating income of 4.155 billion yuan (year-on-year-26.1%), return to the mother net profit of 913 million yuan (year-on-year-52.0%), mainly due to the decline of electricity generation. The company continued to optimize the debt structure, and the asset-liability ratio decreased to 52.4%. The financial expenses of 23H1 23H1 decreased by 100 million yuan (- 26.5% compared with the same period last year). The net operating cash flow of the company is 2.48 billion yuan, and the 22-year dividend rate is 49% (the total dividend is 1.58 billion yuan). Corresponding to the dividend yield of 3.7% on August 21.
With the alternation of abundant and dry incoming water, the average electricity price has increased. In the first half of 2023, the inflow of water from the basin was low, and the hydropower generation capacity of 23H1 Company was 11.3 billion kWh (- 45.8% compared with the same period last year), of which Q1/Q2 power generation was-32.7% less than the same period last year. 54.2% of the water has improved since August, according to the Pearl River Water Conservancy Commission. According to the Pearl River Water Conservancy Commission, the average discharge into Longtan from August to now is-18.7% compared with the same period last year, and the water level is 11 meters lower than the previous year. According to the company's annual report, since 2021, Guangxi has cancelled a number of hydropower profit reduction policies, such as a 10% reduction in the price of hydropower during the flood season, and the company's average electricity price has rebounded somewhat. At the same time, Longtan Hydropower Station has been included in the 14th five-year Plan power supply of the Southern Power Grid to achieve "full price protection." electricity price stability helps to reduce the company's performance fluctuations.
We will vigorously develop new energy sources and open up the second growth point. Starting from 2021, the company will launch new energy construction and rely on Hongshuihe cascade power station to promote the water and landscape integration base. according to the company announcement and statistics, the company plans to invest in nearly 40 scenic projects since 2021, with a total installed 3.12GW (photovoltaic 2.57GW, wind power 0.56GW), with an estimated total investment of 17.354 billion yuan. at present, some projects have been put into production, according to the company's operation announcement. By the end of June, the installed capacity of the company was 0.77 and 0.36 GW, respectively, with a total power generation of 1.209 billion kilowatt-hours (year-on-year + 19.3%).
Profit forecast and investment advice. It is estimated that the company's net return profit in 2023 to 2025 will be 2.53 billion yuan, respectively, and the PE corresponding to the latest closing price will be 17.1, 14.2 and 12.9 times, respectively.
Hydropower faucet high dividend allocation value is outstanding, new energy business growth space is large. With reference to the inter-industry valuation, the company is given a 20-fold PE valuation in 2023, corresponding to 6.42 yuan / share reasonable value, maintaining the "buy" rating of Laureate Electric Power.
Risk hint. Fluctuation of incoming water; fluctuation of feed-in electricity price; project construction is not as expected.