The full-year results turned a sharp loss into a profit. The company released its 2023 annual report, achieving full year revenue of 254.397 billion yuan, YOY +3.11%; net profit to mother was 8.446 billion yuan, reversing the year-on-year loss, YOY +214.33%. The company's sharp loss was due to a year-on-year decrease in fuel costs and a year-on-year increase in electricity volume for domestic business units, as well as a sharp year-on-year increase in profits from the Singapore business. The company's 2023 profit distribution plan is to distribute dividends for 2023 to shareholders at RMB 0.2 (tax included) per common share, corresponding to a dividend payment rate of 57% and a dividend rate of 2.2% corresponding to the closing price of A shares on March 19.
PV installations and feed-in electricity are growing rapidly. By the end of '23, the installed capacity of the company's controllable power generation was 135.66 million kilowatts, of which coal/gas engine/wind power/photovoltaics were 9328/1351/13.1 million kilowatts, YOY -1%/+4%/+14%/+109%, respectively. In 23 years, all power plants in the company completed a total feed-in capacity of 447.9 billion kilowatt-hours, YOY +5.33%; market-traded electricity volume of 395.9 billion kilowatt-hours, YOY +5.33%. The average annual utilization hours were 3776 hours, a decrease of 9 hours; of these, the utilization hours of coal-fired units were 4,388 hours, an increase of 160 hours over the previous year. The average online electricity price was 508.74 yuan/megawatt-hour, down 0.23% from the previous year; the average transaction price of electricity was 484.14 yuan/megawatt-hour, up 19.76% from the benchmark electricity price. Among them, the price of electricity traded for coal was 481.01 yuan/megawatt-hour, up 21.19% from the benchmark electricity price.
Profits in the wind power sector declined, and revenue from ancillary services increased. By sector, coal/fuel engine/wind power/photovoltaic/hydropower/biomass achieved total profit of 4.33/7.77/59.13/20.44/0.17/ -0.41 billion yuan, YOY +102.5%/+35.08%/-5.16%/+78.08%/-25.37%/+61.41%, respectively. The coal-fired sector turned a loss into a profit, mainly due to the fall in coal prices in '23, and the average price of the company's coal procurement decreased by 115.78 yuan/ton year on year; the decline in profits in the wind power sector was mainly due to factors such as an increase in affordable wind power projects and increased market operating costs such as peak and frequency modulation of power systems, which led to a year-on-year decline in wind power prices. The company actively participated in the national power auxiliary service market and achieved net revenue of 2,223 billion yuan/495 million yuan in electricity charges for peak-shifting/FM auxiliary services in 23 years, an increase of 8/445 million yuan over the previous year.
Profit forecasting and investment advice. We expect the company's net profit for 24-26 to be $136, 152 billion, and 17.1 billion yuan, respectively. We believe that the company, as a leading power company, has recovered its performance in the coal and electricity sector, and that new energy also provides continuous growth. Referring to factors such as the introduction of capacity electricity prices in the context of electricity reform and company management optimization that may be brought about by market value management included in the assessment, we will give the company 13 to 15 times PE in 2024, corresponding to a reasonable value range of 11.31-13.05 yuan/share, maintaining a “superior to the market” rating.
Risk warning: Coal prices have rebounded sharply, electricity supply and demand forms have deteriorated, and electricity price policy risks.