Incidents:
The company announced its 2023 results. The company achieved revenue of HK$103.3 billion in 2023, a slight increase over the previous year; net profit to mother was HK$11 billion, an increase of 56.24% over the previous year.
reviews
Thermal power: Core profit turned into profit, and profit may further improve the revenue side. The company's electricity sales volume increased 2.3% year on year to 149.5 billion kilowatt-hours; electricity prices remained high. The average electricity price in the company's market rose 18% compared to the benchmark feed-in tariff in 2023. On the cost side, the average unit fuel cost for attached coal-fired power plants in 2023 was 296.3 yuan per megawatt-hour, down 12.6% year on year; the average unit price of standard coal was 987.5 yuan per ton, down 12.6% year on year. Taken together, the company's thermal power business turned a loss into a profit, contributing to core profit of HK$3,611 billion, and the corresponding unit's core profit of electricity sales was HK$0.024 per kilowatt-hour. At present, coal prices have declined year on year, and the company's thermal power profitability may still improve further. In addition, the company plans to start production of thermal power generators with an installed capacity of 927.2 megawatts within 2024.
Renewable: Contributing to core profit of HK$9.7 billion in 23, the plan is to add 10 GW companies to continue to promote energy transformation in 24. The installed capacity of wind power and photovoltaics to be put into operation in 2023 is 3.1 GW and 2.2 GW, respectively. By the end of 2023, the company's wind power operating equity installed capacity was 18.6GW, and 7.3GW under construction; PV operating equity installed capacity was 3.4 GW, and 6.1GW was under construction. Looking ahead to 2024, the company plans to add 10 GW of installed capacity for wind power and photovoltaic projects. Judging from the operating situation in 2023, the company's wind resources are relatively good. Wind power utilization hours increased 2.2% year on year, while photovoltaic utilization hours decreased by 2%. Combined with the increase in installed capacity, the company's wind power sales increased by 12.4% and 112% year on year, respectively. The core profit contribution of the company's renewable energy business in 2023 was HK$9.726 billion, an increase of 12% over the previous year.
Outstanding dividend performance, with annual dividend payout rate of 62%
Recently, the company announced that it intends to pay a dividend of HK$0.587 per share for the end of 2023. In addition, the company has paid an interim dividend of HK$0.328 per share, bringing the total dividend of HK$0.915 per share in 2023; the dividend ratio is 40%, which is basically the same as the previous year. Furthermore, due to the 20th anniversary of the listing, the company paid a special dividend of HK$0.5 per share. In 2023, the total dividend of the company reached HK$1.415 per share, with a payout ratio of 62%.
Profit forecasting and valuation
Taking into account the company's new installed capacity and changes in coal and electricity prices, the net profit returned to mother is estimated to be RMB 154, 171, and 19.4 billion yuan in 2024-2026, corresponding to PE of 5.6, 5.0, and 4.4 times, maintaining the “buy” rating.
Risk warning: risk of a sharp decline in macroeconomics; risk of electricity price reduction; risk of policy implementation falling short of expectations; risk of industry competition being too intense; risk of continuing delays in subsidies; risk of company development projects falling short of expectations; there is still uncertainty about spin-off and listing in A