Description of the event
The company announced the main operating data for the first quarter of 2024: From January to January 2024, the company completed a cumulative total of 39.542 billion kilowatt-hours of power generation and 38.447 billion kilowatt-hours of feed-in electricity, an increase of 3.27% and 3.01%, respectively, compared with the same period last year. The average feed-in tariff in the company was 0.387 yuan/kilowatt-hour, an increase of 3.75% compared with the same period last year.
Incident comments
Incoming water has dried up the amount of water and electricity, and rising electricity prices have relieved the pressure on performance. In the first quarter of 2024, incoming water from the Sichuan and Yunnan regions continued to dry up, and the output of the Yalong River and Dachaoshan Power Station continued to be under pressure. Affected by this, the company completed 21,434 billion kilowatt-hours of hydropower generation, a year-on-year decrease of 8.31%. Among them, Yalong River hydropower completed 19.629 billion kilowatt-hours, a year-on-year decrease of 8.21%.
Despite the year-on-year decrease in electricity consumption, the increase in feed-in tariffs will ease the pressure on revenue brought by the decline in electricity consumption to a certain extent.
The company's average feed-in tariff for hydropower in the first quarter was 0.318 yuan/kilowatt-hour, up 4.26% year on year. Among them, changes in the electricity structure of the Yalong River led to a 4.46% increase in the average feed-in price of hydropower in the Yalong River; SDIC Xiaosanxia average feed-in tariff was 0.271 yuan/kilowatt-hour, up 4.23% year on year. Overall, since the decline in the company's hydropower volume is greater than the increase in electricity prices, it is expected that the company's hydropower sector performance in the first quarter may still be under some pressure. In addition, thanks to the expansion of installed capacity and improvements in wind resources in some regions, the company maintained rapid growth in new energy power. The company completed 1,782 billion kilowatt-hours of wind power generation in the first quarter, an increase of 15.95% over the previous year; PV completed 1,164 billion kilowatt-hours of power generation, an increase of 135.15% over the previous year. In terms of electricity prices, the company's feed-in tariffs for wind power increased by 1.03% year on year, and PV feed-in tariffs decreased by 33.21% year on year. The main reason for the year-on-year decline in PV electricity prices was due to the fact that new PV units were put into operation as affordable Internet access projects, which lowered the average feed-in tariff. Overall, the company's clean energy business is expected to achieve steady performance in the first quarter, driven by the rapid growth in the amount of new energy and the year-on-year increase in utility prices.
Electricity capacity was increased and costs were optimized, and thermal power performance continued to be repaired. The company's thermal power generation capacity in the first quarter was 15.161 billion kilowatt-hours, up 17.7% year on year, and the electricity volume achieved a significant year-on-year increase, mainly due to: 1) Strong demand for electricity in the region where the company's thermal power units are located, which led to a year-on-year increase in power generation. Among them, electricity demand in Fujian was high. Huaxia Electric Power and Meizhouwan Electric Power completed 1,625 billion kilowatt-hours of power generation, respectively, an increase of 53.16% and 37.66% compared with the same period last year; 2) SDIC Qinzhou Second Radio's first unit was put into operation in the first quarter, and production capacity was put into operation in December 2023. It was released to generate 722 million kilowatt-hours of electricity. In terms of electricity prices, the average feed-in electricity price for the company's thermal power in the first quarter was 0.463 yuan/kilowatt-hour, a year-on-year decrease of 1.91%. Looking at the breakdown, with the exception of SDIC's electricity prices in northern Xinjiang, which increased slightly year-on-year, all other power plants declined to varying degrees. Overall, however, the growth rate of electricity production is much higher than the decline in electricity prices, and the thermal power revenue side will still maintain strong performance. In terms of cost, the coal supply and demand situation relaxed in the first quarter, and coal prices continued to decline. The average market price of Q5500 thermal coal in Qinhuangdao Port in the first quarter was 901.74 yuan/ton, a year-on-year decrease of 20.1%. The continued decline in coal prices will significantly release the pressure on the cost side of thermal power. Therefore, under the influence of maintaining rapid growth on the electricity consumption side and the release of cost pressure, the company's business performance in the thermal power sector in the first quarter will continue to improve, fully release upward flexibility, and reduce the pressure on hydropower performance from dry and incoming water to a certain extent. Therefore, it is expected that the company's first quarter results may achieve steady performance.
Investment advice: According to the latest operating data, we have adjusted the company's profit forecast. It is estimated that the company's corresponding EPS for 2023-2025 will be 0.87 yuan, 1.01 yuan, and 1.09 yuan, respectively, and the corresponding PE will be 18.26 times, 15.79 times, and 14.62 times, respectively, maintaining a “buy” rating.
Risk warning
1. The risk that the progress and benefits of the commissioning of new construction projects fall short of expectations;
2. Wind conditions and lighting resources fall short of expected risks.