Event description
The company released the third quarterly report of 2023: in the third quarter of 2023, the company realized operating income of 16.182 billion yuan, with a year-on-year growth of 4.56%; net profit attributable to parent company was 2.715 billion yuan, with a year-on-year growth of 52.74%.
Event comment
Water supply is under pressure, electricity price increases to ensure stable increase of hydropower performance. In the third quarter, affected by the continuous partial drought of incoming water in Sichuan Province, although the hydropower output of Yalong River of the Company has improved, it still falls year-on-year. In the third quarter, the hydropower generation capacity of Yalong River reaches 27.062 billion kWh, with a year-on-year decrease of 8.65%. The hydropower generation capacity of the Company reaches 30.189 billion kWh, with a year-on-year decrease of 7.40%.
Although the electricity quantity decreased year-on-year, the electricity price of Jinguan power supply group increased significantly due to the change of the electricity price of Jinguan power supply group from the previous local coal benchmark price to the annual electricity transaction price of Jiangsu Province. In addition, since Yangfanggou has not yet defined the electricity price mechanism, Lianghekou is temporarily settled according to the electricity price during the transition period. The on-grid electricity price of hydropower in the third quarter of the company is 0.281 yuan/kWh, with a year-on-year growth of 12.85%. The increase in the on-grid price of hydropower of the Company will effectively relieve the pressure on electricity, and the hydropower performance of the Company is expected to continue to grow in the third quarter. In terms of new energy, the company's wind power generation in the third quarter was 1.58 billion kWh, up 29.85% year-on-year. Photovoltaic power generation reached 854 million kWh, with a year-on-year growth of 72.29%. The rapid growth of electricity was mainly due to the expansion of installed capacity. In the first three quarters, the installed capacity of new energy of the Company reached 1,467,500 kilowatts, an increase of 31.88% compared with the end of last year. Driven by the rapid expansion of new energy, the performance of new energy business of the Company will continue to be stable.
Coal prices fall costs continue to repair, quarterly performance hit a record high. In the third quarter, the company's thermal power generation capacity was 17.094 billion kWh, up 7.61% year-on-year, of which Tianjin SDIC North Xinjiang completed 5.656 billion kWh, up 27.02% year-on-year, which was the main source of the company's thermal power generation growth. In terms of electricity price, the on-grid electricity price of thermal power of the Company in the third quarter was 0.474 yuan/kWh, with a year-on-year decrease of 5.39%. The main reason for the decrease of electricity price was that Huaxia Electric Power Plant and Meizhou Bay Electric Power Plant located in Fujian Province participated in the spot transaction of inter-provincial power transmission in Fujian Province in the same period last year, and the electricity price level was relatively high, thus producing high base effect. In fact, compared with the coal benchmark price, the on-grid price of the two power plants in Fujian Province to which the company belongs is still as high as 24.62%, exceeding 20% or due to the influence of time-sharing mechanism and spot trading. Therefore, on the whole, although the electricity price has been adjusted back, but driven by the rapid growth of electricity, the company's thermal power revenue in the third quarter will continue to grow. In terms of cost, coal prices fell rapidly in the third quarter. The average closing price of Q5500 power coal in Qinhuangdao Port was 866.19 yuan/ton, down 31.51% year-on-year and 5.27% month-on-month. The steady decline of coal prices led to a year-on-year decline in thermal power costs, thus making the company's operating costs in the third quarter 9.065 billion yuan, down 8.03% year-on-year. As the company's power business revenue achieved year-on-year growth, the company's gross profit margin in the third quarter reached 43.98%, an increase of 7.55 percentage points year-on-year. In addition, the company also continued to promote the replacement of high-interest debt, the third quarter financial expenses of 991 million yuan, a year-on-year decline of 18.54%. On the whole, driven by the remarkable repair of hydropower, thermal power and new energy business operations, the company achieved a net profit of 2.715 billion yuan in the third quarter, with a year-on-year growth of 52.74%, a month-on-month growth of 57.56%, and a record high in single-quarter performance.
Investment suggestion: According to the latest financial data, we adjust the company's profit forecast. It is estimated that the corresponding EPS of the company from 2023 to 2025 will be 0.94 yuan, 1.10 yuan and 1.19 yuan respectively, and the corresponding PE will be 12.75 times, 10.86 times and 10.08 times respectively, maintaining the "buy" rating.
Risk hint
1. The production schedule and benefit of the new project are lower than the expected risk.
2. The wind condition and light resources are less than the expected risk.