Incidents: According to the company's 2023 three-quarter report, the company achieved operating income of 6.5 billion yuan in 2023, an increase of 4.41% over the previous year, net profit of 1.02 billion yuan, an increase of 8.52% over the previous year, and net profit after deduction of 958 million yuan, an increase of 7.03% over the previous year. In the first three quarters, the company achieved operating income of 19.730 billion yuan, a year-on-year decrease of 0.69%, net profit of 3,585 billion yuan, an increase of 10.06% year-on-year, net profit of 3.484 billion yuan, a year-on-year increase of 9.47%, basic earnings per share of 1.67 yuan, a year-on-year decrease of 1.76%, and a weighted average return on net assets of 13.06%, a year-on-year decrease of 1.97pct.
Comment:
The Q3 performance in 2023 increased both month on month, mainly due to rising aluminum prices. According to the company's financial report, in 2023, Q3 achieved operating income of 6.521 billion yuan, an increase of 4.41% over the previous year, an increase of 2.45% over the previous year, and net profit of 1.02 billion yuan, an increase of 8.52% over the previous year and an increase of 3.73% over the previous year. According to data from the National Bureau of Statistics, in Q3 of 2023, the average price of aluminum ingots (A00) was 1,8840 yuan/ton, up 2.33% year on year and 1.77% month on month.
The company's coal and electricity business operates steadily, mainly supplying the Northeast region. According to the company's 2023 mid-year report, the company currently has a coal production capacity of 46 million tons/year. It is the largest coal producer in the Mengdong and Greater Northeast regions, and has obvious transportation distance advantages. In terms of coal power, the company currently has 1.2 million kilowatts of thermal power installed. Relying on open-pit coal mines, the electricity generated is mainly transported to Liaoning Province, the load center in the Northeast region. It is the main power supply unit in the Northeast region. The fuel and transportation costs are relatively low, and the average annual utilization time reaches more than 4,500 hours, making it one of the most profitable thermal power generators in the Northeast region.
The company's new energy business is progressing steadily, and it is estimated that the installed capacity will reach more than 10 million kilowatts by the end of the 14th Five-Year Plan. According to the company's 2023 mid-year report, the company has already started production of new energy with an installed capacity of 3.12 million kilowatts. As of June 30, 2023, the company is constructing a total of 2,345,000 kilowatts of wind power projects in Tongliao, a 500,000-kilowatt wind power project in Beligutai, Ximeng, a 400,000-kilowatt wind power project, and a 445,000-kilowatt wind power project in Tuquan County. The company is currently constructing a pilot project to consume 300,000 kilowatts of wind power and 100,000 kilowatts of photovoltaics. After the completion of the project, the circular economy new energy installed capacity will reach 1.05 million kilowatts. The company continues to increase green power construction and further increase the proportion of green electricity. In the 2023 mid-year report, the company raised the “14th Five-Year Plan” new energy installation target from 7 million kilowatts to 10 million kilowatts.
Profit forecasts and investment advice. We expect the 2023-2025 operating revenue of Power Investment Energy to be 27.05 billion yuan, 28.915 billion yuan, and 31.066 billion yuan. Net profit of the mother was 4.409 billion yuan, 4.665 billion yuan, and 5.124 billion yuan. EPS (diluted) is 1.97 yuan, 2.08 yuan, and 2.29 yuan. Based on the closing price of 13.68 yuan on November 16, 2023, the PE was calculated as 6.9x/6.5x/5.9x, giving it an “increase in holdings” rating for the first time.
Risk warning: coal and aluminum prices have fallen beyond expectations, macroeconomic recovery has fallen short of expectations, project construction progress has fallen short of expectations, and the utilization efficiency of new energy units has fallen short of expectations.