Anxin International expects that CGN Electric Power's future profits will maintain steady growth, and that the level of superimposed dividends will remain stable and high.
The Zhitong Finance App learned that Anxin International released a research report saying that maintaining CGN Power's (01816) “buy” rating, the company's power generation is expected to increase steadily year over year in '23, and the combined dividend ratio will maintain an upward trend. The company's overall performance is expected to rise steadily this year, with a target price of HK$2.58. In January-December, the company's nuclear power units generated a total of 228.29 billion kilowatt-hours, an increase of 8.03% over the same period; feed-in electricity during the same period was 214.146 billion kilowatt-hours, an increase of 7.95% over the previous year. The overall operating situation is basically in line with expectations, and there are sufficient new grid-connected projects in the future. The bank expects the company's future profits to maintain steady growth, and the level of superimposed dividends will remain stable and high.
The report's main points are as follows:
The company's 23-year operating data is in line with expectations
From January to December 2023, the nuclear power units managed by CGN Group generated a total of 228.29 billion kilowatt-hours, an increase of 8.03% over the previous year; feed-in electricity during the same period was 214.146 billion kilowatt-hours, an increase of 7.95% over the previous year. According to the unit breakdown, the subsidiary's units generated 178.197 billion kilowatt-hours, an increase of 7.26% over the previous year, and the feed-in electricity capacity was 167.072 billion kilowatt-hours. Among them, the power generation capacity of the Fangchenggang Nuclear Power Plant increased by 44.49% year on year due to the addition of Fangchenggang No. 3, and the power generation capacity of the Taishan Nuclear Power Plant increased 20.18% year over year due to the completion of the Taishan Unit 1 overhaul, driving the total increase in power generation. The joint venture's Hongyanhe Nuclear Power Plant generated 50.93 billion kilowatt-hours, an increase of 10.89% over the previous year. The bank expects that when the impact of the Taishan nuclear power plant overhaul is eliminated and the new unit Fangchenggang No. 4 is connected to the grid as scheduled, the company's power generation capacity will continue to rise steadily, driving performance to continue to improve.
7 units under construction, with sufficient reserves for subsequent projects
Since China's nuclear power approval was restarted in 2019, the industry has begun to accelerate development. As of December 31, the company had a total of 7 units under construction. Among them, Fangchenggang Unit 4 and Huizhou Unit 1 are both in the commissioning phase and are expected to be put into operation and connected to the grid in 2024 and 2025, respectively. In addition, the company has 4 units that have been approved for FDC preparation. There are plenty of preparations for future new grid connections and new construction projects, providing strong support for the company's future medium- to long-term development, and optimistic about the company's future growth potential.
Risk warning: Unit power generation fell short of expectations; unit overhaul time exceeded expectations; electricity price fluctuations exceeded expectations; nuclear power plant construction progress fell short of expectations; nuclear fuel prices exceeded expectations; nuclear power industry policies were tightened.