Brief performance review
On the evening of March 19, 2024, the company disclosed its annual report for the year 23, achieving revenue of 254.397 billion yuan, +3.1% year-on-year; net profit to mother was 8.45 billion yuan, +214.3% year-on-year. Among them, 23 total asset impairment losses amounted to 2.97 billion yuan for the full year, which may be a major drag on performance.
Management analysis
Volume: The company achieved 447.86 billion kilowatt-hours of feed-in electricity for the whole year (+5.3% year over year), of which the coal/gas grid was 3758/27.71 billion kilowatt-hours (+3.3%/+5.2%, respectively); new energy (wind power+photovoltaic) had a total of 42.75 billion kilowatt-hours (+27.9% year over year), accounting for 9.5% (+1.6 pct year on year). The electricity structure continues to be greener, and in the future, the positioning of thermal power will further shift to peak insurance and support regulation (the total net revenue from ancillary services has reached 2.72 billion yuan in 23 years).
Price: Market coal prices declined, and fuel costs for coal mills fell to 0.326 yuan/kWh in '23 (-12.4% year over year). Due to the combined effects of factors such as falling coal prices and the increase in the share of new energy electricity, the average settled electricity price for 23 years was 0.509 yuan/kWh, -0.2% compared to the same period last year.
Looking back, electricity prices for coal capacity are expected to support average electricity prices.
Scenery installations have expanded, and cogeneration units continue to lose value. 23 The company added 2,033 million kilowatts and 6.826 million kilowatts of wind power/photovoltaic installations in the whole year, respectively, in line with expectations.
In 23, the company raised a total of 2.97 billion yuan in asset impairment, of which 2.55 billion yuan of fixed asset impairment mainly involved cogeneration units in Shandong and Anhui provinces, mainly due to transformation policy requirements and pressure on the cost side; the remaining 420 million yuan included 295 million yuan in goodwill impairment, etc. Looking back, the overall quality of assets in operation will improve after the old fleet is phased out.
The dividend plan was released to enhance shareholder returns. The company announced a cash dividend of 0.2 yuan/share, with a cash dividend ratio of 57.1%. Looking ahead, as the attributes of thermal power utilities improve, profit certainty is expected to increase, leading to stable dividend expectations and beneficial shareholder returns.
Profit Forecasts, Valuations, and Ratings
With the recovery of thermal power profits and the implementation of green power installed equipment, the company's performance growth is expected to achieve net profit from 2024 to 2026, respectively
At 134.8/160.98/18.27 billion yuan, EPS was 0.86/1.03/1.16 yuan respectively, corresponding PE was 11 times, 9 times, and 8 times, respectively, maintaining the “buy” rating.
Risk warning
There is a risk that the installed capacity and electricity volume of various types of power supplies fall short of planned expectations, falling coal prices falling short of expectations, and falling electricity prices beyond expectations.