Brief comment on performance
The company released its quarterly report for 23 years on the evening of October 27. 1~3Q23 realized revenue of 69.51 billion yuan, year-on-year + 14.2%, net profit of 5.96 billion yuan, + 1217.3%, and non-return net profit of 5.66 billion yuan, + 2461.4% over the same period last year. 3Q23 realized revenue of 27.78 billion yuan, year-on-year + 11.3%; net profit of 3.18 billion yuan, + 5459.9%; and non-return net profit of 3.04 billion yuan, + 6511.9% of the same period last year.
Business analysis
The high base number + incoming water improvement led to the decline of 3Q23 power generation, and the new unit was put into operation to relieve the pressure.
1~3Q23 's cumulative power generation was 120.78 billion kWh, + 4.3% compared with the same period last year, of which thermal power accounted for 99.8% and + 4.2% compared with the same period last year. The acquisition of Zhonglai shares accelerated the transformation of new energy, and wind and photovoltaic power generation were + 50.9% and + 11.1%, respectively. 3Q23 achieved 45.89 billion kilowatt-hours of electricity generation,-5.5% compared with the same period last year. The decline in power generation is mainly due to the fact that the summer temperature in the Yangtze River Delta is not as extreme as that in the same period last year, and the growth rate of electricity consumption under the influence of a high base is lower than that of the whole country; and due to the improvement of water from the southwest and the substantial increase in inter-provincial electricity purchase in Zhejiang, the space for power generation of thermal power units in the province is narrowed. However, benefiting from the commissioning of new units, the company's cumulative power generation in January and August was + 5.5% compared with the same period last year, which was higher than 3.3% of the average thermal power in the province.
3Q23 ignition price spread continues to widen, performance flexibility than expected release. 3Q23's electricity generation was + 8.4% month-on-month, and the net profit deducted from non-return increased by 70.1% when the investment income decreased by 8.1%, mainly due to the expansion of ignition price difference. 1) cost: the company, as the long association of coastal power plants, accounts for a relatively low share of coal and will fully benefit from the downward price of coal in this round of market.
The average flat price of 3Q23 Qinhuangdao 5500 kcal thermal coal is about 864.5 yuan / ton, down 5.7% from the previous month; the company's Q3 operating cost is 23.28 billion yuan, which is less than the increase in electricity consumption. 2) electricity price: the average on-grid electricity price of 1~3Q23 Company is 0.438 yuan / KWh, which is + 0.5% compared with the same period last year and rose for the third consecutive quarter. We mentioned in the report that the tight supply and demand of power in Zhejiang Province and the good competition pattern of thermal power industry will support the formation of electricity price. We estimate that the average on-grid price of the company's Q3 is about 3.70 yuan / MWh higher than that of Q2, so that the company's Q3 electricity sales revenue increases by about 9.0% month-on-month, which is greater than the electricity growth rate. In addition, taking into account the tail-warping impact of coal prices, the decline in medium-and long-term electricity prices in Zhejiang Province in the past 24 years may be less than expected.
Earnings forecast, valuation and rating
From 2023 to 2025, we expect the company to achieve a net profit of 70.53, 83.9 / 9.46 billion yuan and an EPS of 0.53, 0.63 and 0.70, respectively, and the current price of the company's shares will be 9 times, 7 times and 6 times the valuation of PE, respectively, maintaining a "buy" rating.
Risk hint
Risks such as the progress of new projects, the downward degree of coal prices, power demand, the progress of power marketization, the underperformance of Zhonglai shares, and so on.