Incident: The company announced the completion of power generation for the first quarter of 2024. The total amount of nuclear power generation in 24Q1 was 43.674 billion kilowatt-hours, a year-on-year decrease of 3.13%; the cumulative power generation from new energy sources was 7.416 billion kilowatt-hours, an increase of 60.66% over the previous year.
Comment: Overhauls affect nuclear power, and new energy sources are growing rapidly. The 24Q1 Qinshan nuclear power unit was overhauled more than in the same period last year. The power generation capacity decreased by 6.25% year on year. Fuqing Nuclear Power Unit 4 underwent minor repairs. The power generation capacity fell 10.78% year on year, driving the company's nuclear power generation down 3.17% year on year. Jiangsu Nuclear Power's 24Q1 power generation accounted for 29.1%, mainly due to a decrease in daily peak shifting compared to the same period last year, and power generation increased by 3.90% year on year. Overall, the company's nuclear power generation capacity remained stable. In terms of new energy, under the guidance of the “14th Five-Year Plan” target, the company's new energy installed capacity continued to grow rapidly. The 24Q1 wind power and photovoltaics added 138 and 1.44 million kilowatts respectively, with a cumulative installed capacity of 733 and 1.41 million kilowatts. The power generation capacity was 37.14 and 372,000 kilowatts, respectively, up 63.3% and 58.1% year on year, respectively, and new energy feed-in capacity increased 60.7% year on year. In 23H1, CNNC's net profit increased 58.5% year on year, accounting for 14.9% of the current net profit. As the company's NEV capital expenditure remains high, the company's NEV installed capacity and performance contribution are expected to continue to grow rapidly.
The number of approved projects under construction is sufficient, and the installed capacity of nuclear power is expected to continue to grow. Currently, the Company's Nuclear Power Holdings has an installed capacity of 23.75 million kilowatts. Zhangzhou 1/2 is expected to be put into operation in the next two years, 125,000 kilowatts of Xiaodui in Hainan and 1265,000 kilowatts of Tianwan 7 are expected to be put into operation in 2026. Tianwan 8, Xudabao 3/4, and Sanmen 3/4 are expected to be put into operation in 2027. A total of 5.06 million kilowatts of Zhangzhou 3/4 and Xudabao 1/2 are expected to be put into operation every year from 2028-2029. Nuclear power units were put into operation, with 2027 being the big year of production. In the future, as thermal power and hydropower face the installed ceiling, new energy consumption bottlenecks will become apparent. As the electricity consumption of the whole society grows steadily and the number of nuclear power approvals may rise steadily, the company's installed capacity growth can be expected.
Nuclear power contributes steadily to cash flow, and the dividend value is remarkable. The large-scale nuclear power units being built and approved by the company all use third-generation nuclear power technology. Currently, the first operating license for the third-generation internationally accepted nuclear power unit was issued for the first time in 60 years, and the project will continue to contribute steadily to performance and cash flow after the project is put into operation. In 2023, the company added nearly 6GW of new energy installed capacity. Considering a 20% capital ratio and 70% shareholding ratio, the company's net cash flow from operating activities in 2022 reached 46.7 billion yuan, which is relatively low. The company's dividend rate over the years has been above 35%, and the dividend amount is increasing year by year. In the context of state-owned enterprise reform, it may continue to increase in the future, and the long-term investment value is quite remarkable.
Profit forecast: In 2023-2025, the company's revenue is expected to be 756.62/791.84/86.171 billion yuan, net profit to mother of 10.3.60/113.83/12.824 billion yuan, EPS 0.54/0.60/0.68 yuan, corresponding to PE 17.16/15.41/13.68 times PE. First coverage, giving a “buy” rating.
Risk warning: The crew utilization hours fell short of expectations, and the progress of approved projects under construction fell short of expectations.