Events:
The company publishes its 2023 semi-annual report. In the first half of 2023, the company achieved a total operating income of 4.155 billion yuan, a decrease of 26.07% over the same period last year, a net profit of 913 million yuan, a decrease of 52.03% over the same period last year, and a net profit of 910 million yuan after deduction, a decrease of 52.98% over the same period last year. Net cash flow from operating activities was 2.481 billion yuan, and basic earnings per share was 0.11 yuan.
Main points of investment:
The company is a power generation enterprise under Datang Group, and the decline in performance in the first half of the year is due to the lack of water from the southwest region. The company is a central enterprise subsidiary of Datang Power Generation Group. As of the first half of 2023, China Datang Group held 51.55%, Changjiang Power 10.16% and Changdian Investment Management Company 1.36%. The company's power structure is mainly hydropower. Longtan Hydropower Station (4.9 million kilowatts), the largest installed power station in the company, is located in the Hongshui River Basin. Nanpanjiang Hongshui River Hydropower Base is one of the 13 largest hydropower bases in China. As of June 30, 2023, the company's installed capacity was 12.6879 million kilowatts, of which hydropower installed accounted for 80.67%. The installed capacity of hydropower in Guangxi was 9.1882 million kilowatts, accounting for 2/3 of the installed capacity of hydropower in Guangxi.
In the first half of 2023, due to the serious dryness of water from the southwest region, the Hongshui River basin where the company's backbone power plant is located is 40% drier than that of many years, and the overall hydropower generation of the company is reduced by 45.75% compared with the same period last year.
Since the second half of 2023, hydropower generation in China is gradually warming up. In the first half of 2023, due to the continuous drying up of the overall water supply, the growth rate of hydropower generation in China continued to decline compared with the same period last year. In June, the decline in hydropower generation reached 33.9 percent year on year. Since the second half of 2023, hydropower output is going through a process of gradual recovery. China's hydropower generation narrowed in July compared with the same period last year, and increased in August. Hydropower generation decreased by 17.5% in July compared with the same period last year.
The company is mainly based on clean energy, hydropower + new energy power generation accounts for nearly 90%. The power structure of the company is mainly green and low-carbon clean energy, and hydropower is the main source of performance of the company. with wind power and photovoltaic power projects coming into production, as of the first half of 2023, the installed capacity of wind and scenery is 76.60 million kilowatts, accounting for 89.52% of the total. In addition, 133.00 million kilowatts of thermal power will be installed. Benefiting from the policy of giving priority to access to the Internet for clean energy, the number of hours of hydropower utilization is relatively stable, the overall average electricity price is low, and it has a strong competitive advantage in the electricity market competition; wind power and photovoltaic power generation should also be fully developed with the support of the policy.
The company continues to improve the efficiency of capital management and actively participate in the reform of the electricity sales side. The company issued the first energy guarantee special bond of 500 million yuan in Guangxi in 2023, which is the lowest company rate of the same kind of bonds of the same maturity in 2023. The comprehensive financing cost rate fell to 2.98% in the first half of 2023. The company actively participated in the reform of the power sales side, established a wholly-owned subsidiary Guangxi Datang Guiguan Electric Power Marketing Co., Ltd., and jointly established a plant-grid joint venture power sales company with Guangxi Power Grid Company. participated in the Guangxi district government-led power trading center and won board seats, extended the industrial chain, and cultivated new benefit growth points.
The company plans to implement a dividend of 631 million yuan in mid-2023. Since its listing in 2000, the company has maintained cash dividends every year, and has implemented cash dividends 23 times, with a cumulative cash dividend amount of 14.286 billion yuan and a dividend rate of 58.78%. From 2020 to 2022, the company implemented a cash dividend of 14.98 yuan, respectively, with a cash dividend of 1.182 billion yuan. In addition, the company plans to implement cash dividends for every 10 shares in the middle of 2023, with a total dividend of 631 million yuan (including tax).
Investment suggestion: it is estimated that the net profit of the company belonging to the shareholders of the listed company in 2023, 2024 and 2025 is 2.47 billion yuan, 2.947 billion yuan and 3.283 billion yuan respectively, and the corresponding earnings per share are 0.31,0.37 and 0.42 yuan per share. Calculated according to the closing price of 5.57 yuan per share on September 27, the corresponding PE is 17.77,14.90 and 13.37 times, respectively. Taking into account the company's own profitability, valuation level and the prosperity of the hydropower industry, cover for the first time, give the company a "buy" investment rating.
Risk tips: water is not as expected; coal price fluctuation risk; electricity demand is not as expected; electricity price decline risk; project progress is not as expected; policy promotion is not as expected; system risk.