Incidents:
The company issued the “2023 Annual Results Report Notice” and the “2023 Power Generation Completion Notice”. The performance was good. In 2023, the company achieved total operating revenue of 26.451 billion yuan, an increase of 11.08% over the same period of the previous year (after adjustment), and achieved net profit of 7.346 billion yuan, an increase of 4.50% over the same period of the previous year (after adjustment), and the performance was in line with expectations.
High installed capacity boosts power generation growth
The company expects to add 13.5 GW of installed capacity in 2023, with a total installed capacity exceeding 40 GW. The company's installed capacity continues to increase, driving an increase in power generation and performance improvement. In terms of power generation, the cumulative total power generation capacity in 2023 was 51,179 billion kWh, up 14.12% year on year. Among them, wind power increased 14.75% year on year (land wind increased 16.53% year on year, sea wind increased 11.21% year on year), and solar power generation increased 14.23% year on year.
New installations were connected to the grid one after another. 2023Q4 power generation was higher than the annual average 2023Q4. The company's total power generation capacity was 15.146 billion kilowatt-hours, up 16.19% year on year, wind power increased 11.06% year on year, and solar energy increased 33.32% year on year. The growth rate of solar power generation is much higher than the annual average, mainly due to large-scale new installations connected to the grid. On the one hand, there is a large scale of new installed capacity in 2023. On the other hand, it benefits from the reduction in installed costs of photovoltaics and wind power, and the increase in the profitability of new projects. The 2024Q1 power generation and profitability are worth looking forward to.
The savings business ushered in high-quality development
In December 2023, the company plans to transfer all or part of the shares of six project companies including the holding subsidiary Three Gorges New Energy Pumped Storage (Golmud) Co., Ltd. to Three Gorges Onshore Renewable Energy Investment Co., Ltd. Onshore Energy Investment is a holding subsidiary of Onshore Energy. Three Gorges Energy holds 34% of the shares, Changjiang Electric Power holds 33% of the shares, Three Gorges Capital holds 16.5% of the shares, and Three Gorges Investment holds 16.5% of the shares. Through cooperation with Changjiang Electric Power and Three Gorges Capital, the company's savings business is expected to learn from experience and usher in high-quality development.
Profit Forecasts, Valuations, and Ratings
We expect the company's 2024E-2025E revenue to be 339.32/38.724 billion yuan, respectively, with year-on-year growth rates of 28.29%/14.12%, net profit to mother of 98.42/11.216 billion yuan, respectively, with year-on-year growth rates of 33.99%/13.96%, and EPS 0.34/0.39 yuan/share, respectively. Since the company is a leading new energy operator, Scenery Savings has all ushered in high-quality development. Referring to comparable company valuations, we gave the company 16 times PE in 2024, with a target price of 5.44 yuan, maintaining a “buy” rating.
Risk warning: installation progress falls short of expectations, rising installation costs, fluctuating electricity prices