Incident: The company released its 2023 annual report, achieving full year revenue of 34.572 billion yuan, a year-on-year increase of 6.38%; net profit to mother of 1,870 billion yuan (net net of 1,796 billion yuan), an increase of 3014.44% year-on-year (1835.13% year-on-year increase). The 2023 profit distribution plan is to pay cash of 1 yuan (tax included) for every 10 shares, and the cash dividend amount is 378 million yuan (tax included), accounting for 57.97% of the company's cumulative distributable profit at the end of 2023, showing a strong willingness to distribute dividends.
Coal prices have declined, and profitability has improved dramatically.
By sector, the company's energy sector's revenue was 33.693 billion yuan, up 6.57% year on year, and total profit was 851 million yuan, up 141.28% year on year, mainly due to falling coal market prices and increasing marginal revenue from the coal power business; the company's financial sector was steady and improving, with total profit of 2,711 billion yuan, up 22.49% year on year.
The company's gross profit margin and net profit margin for the reporting period were 9.62% and 8.61%, respectively, +9.52pct and +7.66pct; the expense ratio for the period was 5.88%, -0.43pct year on year; ROE (weighted) 6.64%, +6.40pct year on year. During the reporting period, the company calculated depreciation of 626 million yuan, which dragged down the annual profit level. The company's balance ratio during the reporting period was 55.62%, +1.68pct year over year, and remained at a relatively low level. During the reporting period, the company's current net revenue was 3.792 billion yuan, a year-on-year decrease of 18.74%; the revenue ratio was 110.04%, the net profit cash content was 202.74%, and the operating cash flow situation remained at an excellent level.
2024Q1's performance is growing rapidly, and it is worth looking forward to continued improvement in full-year results.
The company previously released a performance forecast for the first quarter of 2024. 2024Q1 deducted 795 million yuan of non-net profit from the mother, an increase of 208.29% over the previous year. The sharp increase in the company's performance was mainly due to a drop in coal prices and an increase in feed-in electricity.
2024Q1, the average price of 5,500 kcal thermal coal in Jingtang Port was about 900 yuan/ton, down about 230 yuan/ton. As of April 11, the liquidation price of 5,500 kcal thermal coal in Qinhuangdao was 808 yuan/ton, down 217 yuan/ton from the previous year.
Against the backdrop of weak overall demand and squeezing hydropower and new energy output, we judge that the focus of coal prices is expected to continue to decline; at the same time, demand for electricity in Jiangsu is strong, and thermal power prices remain at a high level; the company's annual performance is expected to continue to rise.
The holding is about to put into operation 5 million kilowatts of installed capacity, and long-term growth is impressive.
The company has put into operation an assembly machine capacity of 15.454 million kilowatts, including 8.92 million kilowatts of coal in Jiangsu Province, 2.592 million kilowatts of combustion engines, and 3.96 million kilowatts of coal-fired units in Shanxi Province. On September 26, 2023, the company's Sheyang Port #1 unit was put into operation, which will bring an increase in the company's feed-in electricity capacity in 2024.
The company currently has 5 million kilowatts of installed capacity under construction, accounting for 38.87% of the installed coal-fired capacity that the company has put into operation. Among them, the Binhai Port 2* 1 million unit is expected to be put into operation by the end of 2024, the Shazhou 2* 1 million kilowatt unit is expected to be put into operation in mid-2025, and the Jingjiang 2* 1 million kilowatt unit with one control is also expected to be put into operation by the end of 2025. The completion of the unit under construction will provide the company with a continuous impetus for performance growth.
Valuation analysis and rating instructions:
The company's net profit for 2024-2026 is estimated to be 2,973 billion yuan, 3.462 billion yuan, and 3,928 billion yuan, respectively. The corresponding PE is 10.95 times, 9.41 times, and 8.29 times, respectively, maintaining the “recommended” rating.
Risk warning: the risk that coal prices will rise more than expected; the risk of a reduction in feed-in tariffs.