Core views
In 2023, the company achieved operating revenue of 122.404 billion yuan, an increase of 4.77% over the previous year, mainly due to the year-on-year increase in feed-in tariffs and the increase in clean energy installed capacity driven by the increase in feed-in power; net profit to mother of 1,365 billion yuan, an increase of 1,773 billion yuan over the previous year, mainly due to the increase in the company's clean energy profit contribution and improvement in coal combustion costs driving the recovery of thermal power profits. The company continues to promote the clean energy transition. By the end of 2023, the installed capacity of the company was 73.291 million kilowatts, and the proportion of clean energy installed increased to 37.75%.
In addition, the company approved a total of 22.7471 million kilowatts of installed capacity, and the proportion of clean energy is expected to increase further after gradual commissioning. Under a trend where thermal power profits continue to improve and the profit contribution of new energy sources continues to grow, we expect the company's operating performance to grow steadily. We expect the company's net profit to be 5.525 billion yuan, 5.810 billion yuan, and 6.219 billion yuan respectively from 2024 to 2026, corresponding to EPS of 0.22 yuan/share, 0.23 yuan/share, and 0.25 yuan/share, maintaining a “buy” rating.
occurrences
Datang Power Releases 2023 Annual Report
In 2023, the company achieved operating income of 122.404 billion yuan, a year-on-year increase of 4.77%; achieved net profit of 1,365 billion yuan, turning a loss into a profit; realized net profit of 564 million yuan without return to mother, an increase of 2,044 billion yuan; achieved a weighted average return on net assets of -1.04%, an increase of 5.19 percentage points over the previous year; and achieved basic earnings per share of -0.0154 yuan/share, an improvement of 84.04% year on year.
Brief review
Operating results turned losses into profits, and financial expenses improved year-on-year
In 2023, the company's performance turned a loss into a profit, achieving operating income of 122.404 billion yuan, an increase of 4.77% over the previous year, mainly due to the year-on-year increase in feed-in electricity prices and the increase in installed capacity of clean energy driven by the increase in feed-in electricity. In 2023, the company achieved feed-in power of 259.426 billion kilowatt-hours, and the combined caliber feed-in tariff (tax included) was 466.41 yuan/megawatt-hour, an increase of 5.06% and 1.22% over the previous year. In 2023, the company achieved net profit of 1,365 billion yuan, an increase of 1,773 billion yuan over the previous year, mainly due to the increase in the company's clean energy profit contribution and improvement in coal combustion costs, which led to a recovery in thermal power profits. By business, in 2023, the company achieved profits of 1.33, 3.92, 25.56, 4.80, and 1,383 billion yuan respectively, with year-on-year changes of +59.20, +4.83, +2.70, 0.36, and -244 billion yuan. The year-on-year decline in hydropower profit was mainly due to severe depletion of incoming water, which led to a year-on-year decline in power generation capacity; thanks to the decline in fuel prices, the company's thermal power generation unit fuel cost decreased by 27.21 yuan/megawatt-hour year on year, and thermal power profit improved year on year. In terms of the period expense ratio, the company's sales expense ratio, management expense ratio, R&D expense ratio, and financial expense ratio in 2023 were 0.10%, 3.24%, 0.02%, and 4.63%, respectively, with year-on-year changes of +0.004, +0.12, +0.001, and -1.03 percentage points. The company's financial expense ratio improved year-on-year in 2023, mainly due to a reduction in interest expenses. In 2023, the company accrued asset impairment of 1,356 billion yuan, mainly due to impairment losses of 1,213 billion yuan for projects under construction. The company's profit returned to mother in 2023, but earnings per share were negative, mainly due to the company withdrawing interest of 1,651 billion yuan on perpetual bonds.
The clean energy transition is progressing steadily. Companies with abundant installed equipment resources under construction have been approved to actively promote the green energy transition, and the proportion of clean energy installed has continued to increase. By the end of 2023, the company had an installed capacity of 73.2910 million kilowatts, of which coal engines, gas turbines, hydropower, wind power and photovoltaics were 4562.40, 663.16, 920.47, 746.45, and 4.3662 million kilowatts respectively, accounting for 62.25%, 9.05%, 12.56%, 10.18% and 5.96%, and the proportion of clean energy installed increased to 37.75%. In 2023, the company added 4.7992 million kilowatts of installed capacity, including 57.70, 204.75, and 1,6047 million kilowatts of gas engines, wind power and photovoltaics, respectively; 9.6647 million kilowatts of installed capacity, of which thermal power, wind power, photovoltaics and energy storage were 467.01, 304.77, 214.69, and 100,000 kilowatts, respectively. In addition, the company approved 12.7824 million kilowatts of installed capacity in 2023, including 7.7064 million kilowatts of new energy projects and 5.076 million kilowatts of thermal power projects. As the company approves the gradual operation of the installed equipment, the company's clean energy ratio is expected to increase further.
Thermal power profits continue to improve, green power installations are growing rapidly, maintaining the “buy” rating. Currently, the thermal coal market has sufficient supply and sufficient thermal coal stocks for downstream power plants. We expect that 2024 coal prices will maintain a downward trend, and the company's thermal power profitability is expected to continue to improve. At the same time, the company is actively promoting the green energy transition, and the installed scale of new energy sources and feed-in electricity are rapidly increasing. Under a trend where thermal power profits continue to improve and the profit contribution of new energy sources continues to grow, we expect the company's operating performance to grow steadily. We expect the company's net profit to be 5.525 billion yuan, 5.810 billion yuan, and 6.219 billion yuan respectively from 2024 to 2026, corresponding to EPS of 0.22 yuan/share, 0.23 yuan/share, and 0.25 yuan/share, maintaining a “buy” rating.