Description of the event
The company announced its 2023 results: in 2023, the company achieved revenue of 44.262 billion yuan, an increase of 1.31% year on year; realized profit attributable to equity owners of 3.084 billion yuan, an increase of 16.48% year on year; realized profit attributable to common shareholders of 2,660 billion yuan, an increase of 7.23% year on year.
Incident comments
Thermal power profits have recovered significantly, and incoming water has dried up, and hydropower performance is under pressure. Affected by the company's completion of the sale of shares in two coal-fired power plants at the end of 2022, the company sold 54.987 billion kilowatt-hours of electricity in 2023, a year-on-year decrease of 18.97%. As a result, the company's thermal power business achieved revenue of 23.929 billion yuan in 2023, a decrease of 16.28% over the previous year. In terms of cost, thanks to the continued release of domestic coal production capacity, the company's fuel cost per unit in 2023 was 285.51 yuan/megawatt-hour, a year-on-year decrease of 12.46%. In addition, after the company disposed of its shares in coal and electricity assets and converted them into joint ventures or joint ventures, thermal power accounts for 180 million yuan in the performance of joint ventures and joint ventures, which is a significant improvement over the 22-year loss of 439 million yuan. Overall, driven by the rapid release of operating pressure brought about by falling costs, the company's Thermal Power Division achieved net profit of 1,315 billion yuan in 2023, a sharp reversal of losses compared to the loss of 1,391 billion yuan in 22. The net profit of holding Thermal Power reached 0.019 yuan/kilowatt-hour, achieving excellent performance. In terms of hydropower, due to the depletion of incoming water, the company's hydropower generation capacity in 2023 was 11.711 billion kilowatt-hours, a year-on-year decrease of 35.49%. As a result, the company's net profit for hydropower in 2023 was a loss of 826 million yuan, a year-on-year decrease of 1,088 million yuan, which dragged down the company's overall performance.
New energy performance is growing rapidly, and changes in the equity structure affect overall performance. In 2023, the company's consolidated installed capacity increased by 13.4.196 million kilowatts, of which 9.137,800 kilowatts came from clean energy acquisitions. Driven by the rapid expansion of installed capacity, the company's wind power sold 18.497 billion kilowatt-hours, an increase of 69.23% year on year; PV completed sales of 14.607 billion kilowatt-hours, an increase of 49.43% year on year. The net profit of the company's wind power division in 2023 reached 3.116 billion yuan, a year-on-year increase of 82.50%; the net profit of the photovoltaic division reached 1,504 billion yuan, an increase of 46.91% year-on-year. However, since the company sold 60% of Xinyuan Integrated's shares in 2022, generated revenue of about 650 million yuan, and the revenue generated from the acquisition of 23 companies by China Power International New Energy Holdings and China Electric Power (New Energy) Holdings, the net profit in the undistributed segment reached 1,049 million yuan in 2022. Undistributed net profit fell to -612 million yuan in 2023 because there were no more such high one-time earnings, limiting the company's overall performance growth. Therefore, under the combined influence, the company's net profit in 2023 was 4,534 billion yuan, an increase of 68.84% over the previous year. Profit attributable to equity owners was 3.084 billion yuan, up 16.48% year on year. The growth rate was weaker than net profit mainly due to the divestment of some controlling interests and a decrease in the share of equity in new consolidated projects; achieving profit attributable to common shareholders of 2,660 billion yuan, an increase of 7.23% year on year. The weak performance was mainly due to the year-on-year increase in interest on perpetual bonds due to the acquisition of new energy assets in 2023.
Investment advice: The company plans to pay a dividend of RMB 0.132 (HK$0.1455) per share, an increase of 20% over the previous year, which is higher than the performance growth rate, demonstrating the company's importance and sincerity in the capital market. The company's dividend rate reached 61.38% in 2023, and the steady dividend return highlights the company's excellent investment value. We expect 2024-2026 results to be 5.05 billion yuan, 6.048 billion yuan, and 7.159 billion yuan, respectively, corresponding EPS of 0.40 yuan, 0.49 yuan, and 0.58 yuan, respectively, and corresponding PE of 7.47 times, 6.18 times, and 5.22 times, respectively. Maintain the company's “buy” rating.
Risk warning
1. The risk that the progress and benefits of the commissioning of new construction projects fall short of expectations;
2. Wind conditions and lighting resources fall short of expected risks.