绿电：装机容量增长驱动收入增长，光伏发电经营利润受资产减值影响京能2023 年风电/光伏发电收入同比增长5%/9%，经营利润同比+15%/-9%，收入增长得益于发电量同比增长16%/5%，光伏发电经营利润下降主要系个别资产计提减值损失所致。京能持续推动“风光战略”引领发展，2023 年末试运营项目合计1.69GW，在建项目1.43GW，储备项目超25.60GW。考虑到在建项目、储备项目和公司目标，我们预测2024-2026 年公司风光新增装机分别为3.1/4.9/3.1GW，对应绿电总产能复合年增长率为28%。Net profit attributable to mother in 2023 was +8% YoY, maintaining the “Buy” rating
Jingneng Clean Energy (Jingneng) announced its 2023 results on March 26: achieved revenue of RMB 20.446 billion in 2023, +2% year-on-year, net profit to mother of RMB 3,058 billion, +8% year-on-year, and net profit to mother lower than Huatai's forecast. Main business conditions in 2023:1) Wind power/photovoltaics added 0.50/0.29 MW of grid-connected capacity; 2) Development and acquisition of 5.33 GW of renewable energy projects. The company's dividend ratio increased 3pp to 38% year over year, corresponding to a dividend rate of 9.4%. Considering the adjustment of feed-in tariffs for gas power plants in Beijing in 2024 and market-based electricity prices for green power, we expect net profit to be RMB 33/41/49 billion yuan (previous value: RMB 42/50 billion to RMB) for 2024-2026, corresponding to BPS of RMB 3.96/4.25/4.58 yuan. We lowered our target price to HK$2.01, corresponding to 0.46xPb in 2024 (previous value: HK$2.02, based on 0.5xPb in 2023), a discount of 0.20x from Wind's consistent average expectations, as the company's 24-25 net profit CAGR (15%) was lower than the comparable average (17%).
The company has significant characteristics of undervaluation and high dividends. Long-term value is expected to be released and “buying” is maintained.
Green power: The increase in installed capacity drives revenue growth. The operating profit of photovoltaic power generation was affected by asset impairment, and Jingneng's wind/photovoltaic power generation revenue increased 5%/9% year on year in 2023, and operating profit increased by +15%/-9% year on year. Revenue growth was due to 16%/5% year-on-year increase in power generation. The decline in photovoltaic power generation operating profit was mainly due to impairment losses calculated by individual assets. Beijing Energy continues to promote the “Scenery Strategy” to lead development. At the end of 2023, the total number of trial operation projects was 1.69 GW, the projects under construction were 1.43 GW, and the reserve project exceeded 25.60 GW. Considering the projects under construction, reserve projects and company goals, we predict that in 2024-2026, the new installed capacity of the company will be 3.1/4.9/3.1 GW, respectively, corresponding to a compound annual growth rate of 28% in total green power production capacity.
Gas and electricity: Operating profit continued to grow in '23. Beijing's gas and electricity price adjustments in '24 may have an impact. Beijing Energy's gas and electricity revenue increased 1% year on year in 2023, but the heating period was shortened year on year, and heat energy revenue decreased 2% year on year. The operating profit of the natural gas power generation and heating sector increased 1% year-on-year, thanks to the perfect favorable price mechanism and increased government subsidies. At the end of 2023, the company's gas and electricity installed capacity remained at 4.7 GW, and the project under construction was 0.15 GW. According to the company's announcement, feed-in tariffs for Beijing gas power plants will be adjusted from January 1, 2024, and the company expects to reduce the profit of the gas power generation and heating sector by 600 to 700 million yuan in 2024.
Scarce green electricity labels with undervalued and high dividends
Jingneng's share of green power's operating profit has increased dramatically from 38% in 2017 to 74% in 2023. As Scenery's installed capacity grows and there is still room for future profit growth, we believe the company has become a clear green power standard. The company's current stock price corresponds to 3.8xPE and 0.38xPb in '24, and the valuation is significantly lower than that of Hong Kong's Green Power peers. However, the company maintained a stable and upward dividend payment policy. In 2023, the dividend ratio increased to 38% and the dividend ratio reached 9.4%, all better than peers.
Risk warning: Natural gas prices have risen excessively; Green Power's production capacity is falling short of our expectations.
