Incident: Recently, the company disclosed its 2023 annual report. In 2023, the company achieved revenue of 254.397 billion yuan, an increase of 3.11% over the previous year; achieved net profit of 8.446 billion yuan, turning a year-on-year loss into a profit.
Comment:
The company turned a loss into a profit in 2023, mainly due to (1) a year-on-year decrease in fuel costs and a year-on-year increase in electricity volume for domestic business units; (2) a sharp year-on-year increase in the company's profit in Singapore. In 2023, the company's operating power plants in China completed a total of 474.677 billion kilowatt-hours of power generation and 447.856 billion kilowatt-hours of feed-in electricity, up 5.23% and 5.33%, respectively. Looking at a single quarter, the 2023Q4 company achieved revenue of 63,075 billion yuan, an increase of 0.48% year on year; realized net profit to mother - 4.118 billion yuan, and losses increased year on year.
The company's profitability in 2023 benefited, among other things, from falling fuel prices. In 2023, the company's gross margin was 12.12%, up 9.07 percentage points year on year; net interest rate was 3.57%, up 7.66 percentage points year on year. The company's marked increase in profitability was mainly due to the year-on-year decline in fuel prices, etc. Looking at the single quarter, 2023Q4's gross margin was 9.86%, up 5.33 percentage points year on year; net margin was -6.93%, up 0.40 percentage points year on year.
The company has a large thermal power installation and advanced equipment. By the end of 2023, the installed capacity of the company's controllable power generation was 135.66 GW, of which the installed capacity of the coal engine was 93.28 GW, the installed capacity of the combustion engine was 13.23 GW, and the installed scale of thermal power generation was large. More than 55% of the company's coal-fired units are large units of 600,000 kilowatts or more, including 16 million-kilowatt ultra-supercritical units that have already been put into operation, and are equipped with advanced equipment.
Low-carbon clean energy is developing rapidly. By the end of 2023, the company's low-carbon clean energy accounts for 31.24%, an increase of 5.17 percentage points over the previous year. Among them, wind power, natural gas power, solar power, hydropower, and biomass power generation accounted for 11.43%, 9.75%, 9.66%, 0.27%, and 0.12%, respectively. In 2023, the generation capacity of photovoltaics, bio-power, and wind power in the company's domestic power plants increased sharply by 81.03%, 17.86%, and 15.56%, respectively, over the same period last year, and low-carbon clean energy developed rapidly.
Investment advice: The company's EPS is expected to be 0.85 yuan, 0.97 yuan, and 1.04 yuan respectively in 2024-2026, corresponding PE is 12 times, 10 times, and 10 times, respectively, maintaining the company's “buy” rating.
Risk warning: Policy progress falls short of expectations; economic development falls short of expectations; risk of feed-in tariff fluctuations; risk of thermal coal price fluctuations; new energy projects fall short of expectations, etc.