Revenue has been growing steadily, and net profit has continued to improve. In 2023H1, the company achieved revenue of 20.046 billion yuan (+25.36%), net profit attributable to mother of 788 million yuan, net profit of 756 million yuan after deducting non-attributable net profit of 756 million yuan, turning loss into profit. Among them, quarterly revenue for the second quarter was 9.904 billion yuan (+27.49%), and net profit for the second quarter was 453 million yuan, a significant improvement over the previous year. The increase in the company's revenue is mainly due to the increase in installed capacity of Fengguang New Energy and the increase in power generation due to the commissioning of Turkey's Hunutlu coal-fired power project in June 2022. At the same time, the year-on-year increase in feed-in tariffs also contributed; 2023H1, the company's power generation capacity was 35.041 billion kilowatt-hours (+27.64%), the feed-in electricity volume of 33.499 billion kilowatt-hours (+27.72%), and the average feed-in tariff (+4.60%). The company's net profit turned from loss to profit mainly due to the decline in coal, electricity, and fuel costs. The unit price (tax included) of the 2023H1 company's standard coal entering the factory was 1219.67 yuan/ton (-12.08%).
Coal prices continue to be low, and there is still room for further improvement in thermal power profits. In the first half of 2023, domestic coal production capacity continued to be released, imported coal increased dramatically, and coal supply capacity increased steadily. At the same time, due to limited growth in demand for coal used in some industries, coal prices gradually declined. Currently, domestic ports and power plant electricity and coal depots remain at a high level, and coal prices are low, which is conducive to the continuous improvement of the company's coal power profits.
The scale of new energy installations continues to grow, and project resources are being actively expanded. 2023H1, the company's new energy added 234,400 kilowatts of installed capacity, including 40,000 kilowatts of wind power and 194,400 kilowatts of photovoltaics; as of 2023H1, the company's total installed capacity of Fengguang New Energy was 8,422,500 kilowatts, including 3,9241 million kilowatts of wind power and 4,4984 million kilowatts of photovoltaics. 2023H1. The company has vigorously developed base-level new energy projects in western China, actively promoted the implementation of clean energy projects in East China, and accelerated the development of energy resources in counties. It has obtained 900,000 kilowatts of competitive capacity, including 450,000 kilowatts of offshore wind power in Shanghai, 200,000 kilowatts of wind power in Dangchang, Gansu, 250,000 kilowatts of wind power and photovoltaics in Guangxi Autonomous Region. The operation of future new energy projects will drive the company's performance to continue to grow.
Risk warning: declining electricity consumption; rising coal prices; falling electricity prices; new energy projects falling short of expectations; changes in industry policies.
Investment advice: Lower the profit forecast and maintain the buying rating. Since the growth of new energy installed capacity fell short of expectations and the profit forecast was lowered, the company's net profit for 2023-2025 is estimated to be 21.2/30.5/3.62 billion yuan respectively (the original forecast value for 2023-2025 was 26.5/32.9/3.89 billion yuan, respectively), up 561.5%/43.5%/18.9%; EPS was 0.75, 1.08, 1.29 yuan, and the current PE price was 12.2/8.5/7.2x. The company was given 10-11 times PE in 2024, corresponding to a reasonable value of 10.81-11.89 yuan/share. There is a premium margin of 18%-29% compared to the current stock price, and the “buy” rating is maintained.