The operating income has declined and the net profit of home ownership has increased. In the first three quarters of 2023, the company achieved revenue of 28.104 billion yuan (- 6.99%), net profit of 6.108 billion yuan (+ 14.10%) and non-return net profit of 6.072 billion yuan (+ 14.04%). Among them, the revenue in the third quarter was 8.253 billion yuan (- 3.40%), the net profit was 1.15 billion yuan (+ 12.59%), and the non-return net profit was 1.176 billion yuan (+ 9.88%).
The reason for the decline in the company's operating income from the same period last year is due to the decrease in coal sales revenue due to the decline in average coal sales and average purchasing prices; the increase in the company's net profit from the same period last year is due to the increase in power generation due to the increase in the scale of new energy installation and the increase in power business revenue.
The resource reserves of new energy projects are relatively sufficient to ensure future performance growth. The company continues to expand new energy project resources, as of June 2023, the company has signed a new development agreement 29.34GW, in which wind power 15.32GW and photovoltaic 14.02GW are located in areas with better resources; cumulative development indicators 4.01GW, including wind power 1.58GW and photovoltaic 1.49GW. The company's new energy project resources reserve is relatively sufficient, the future reserve of project resources gradually put into operation will drive the company's performance to continue to grow steadily.
CCER restart to promote, carbon asset management brings incremental performance. On October 20, the Ministry of Ecology and Environment and the General Administration of Market Supervision issued the measures for the Administration of Voluntary greenhouse Gas Emission reduction Trading (for trial implementation), clarifying the examination and registration of CCER projects, verification and registration of emission reductions, and trading methods; since then, the Ministry of Ecology and Environment issued four methodologies: afforestation carbon sequestration, grid-connected photothermal power generation, grid-connected offshore wind power generation, and mangrove construction, and CCER was gradually launched. Since 2023, the company has actively participated in the construction of the carbon market and deeply participated in the preparation of the two methodologies of distributed renewable energy power generation and offshore wind power led by China Power Union. At the same time, the company actively develops CDM, CCER, VCS, green power certificate and other projects, implements carbon emissions and carbon trading plans, and efficiently carries out a number of green card transactions, bringing incremental performance for the company.
Risk tips: electricity consumption decline; electricity price decline; new energy projects are less than expected; market competition intensifies; industry policy changes.
Investment advice: lower the profit forecast. Due to the decline in wind power generation in the third quarter compared with the same period last year, the company's profit forecast is lowered. It is estimated that the company's net profit from 2023 to 2025 will be 74.7 billion yuan 90.010 billion yuan (the original forecast is 10.33 billion yuan 94.9 billion yuan respectively), an increase of 46.0% 20.5% and 14.5% respectively over the same period last year. The EPS is 1.18 yuan for 1.03 EPS, and the current share price is 22.7919.6 for 17.1X for PE. The company will be given 19-20 times PE in 2024, with a reasonable market capitalization of 1709-179.9 billion yuan and a reasonable value of 20.39-21.46 yuan per share, which is 1% premium to the current stock price and maintains the "overweight" rating.