Event: The company released its results report for the first quarter of 2024. In the first quarter of 2023, the company achieved operating income of 65.367 billion yuan, up 0.15% year on year; realized net profit of 4.596 billion yuan, up 104.25% year on year; net profit after deducting non-return to mother was 4.377 billion yuan, up 117.98% year on year, with basic earnings per share of 0.25 yuan. High performance growth in a single quarter was mainly due to lower fuel costs, continued improvement in coal and electricity profits, and growth in electricity volume.
Thermal power: Electricity profits improved markedly from month to month, and profitability continued to increase. Q1 The company's coal-fired and combustion engine power generation capacity was 922.26/7.154 billion kilowatt-hours, respectively, +3.05%/-1.73% year on year; total profit was 2,825 million yuan/536 million yuan (23Q1 total coal power profit - 70 million yuan), respectively, a significant increase over the previous year.
It is estimated that Q1 coal-fueling/combustion engine electricity profits were 0.031/0.075 yuan respectively, up 0.029/0.047 yuan respectively from 2023. Electricity profit improved significantly, and thermal power profitability continued to increase. Combined with the recent frequent introduction of electricity reform policies, construction of the national electricity spot market will be accelerated, and electricity prices for thermal power capacity are also about to rise, which is expected to continue to improve the profitability of thermal power.
New energy: Wind and solar power generation has increased rapidly, and new energy sources continue to expand. Driven by the company's low-carbon transformation strategy and declining landscape costs, the company's Q1 new energy installed capacity continued to expand. The new wind power/photovoltaic installed capacity was 869.05/736.8 MW, totaling 1605.85 MW; the power generation capacity was 100.28/3.22 billion kilowatt-hours, respectively, +24.08%/+73.73% year-on-year; total profit was 24.14/370 million yuan, respectively. It is estimated that the Q1 wind power/photovoltaic power profit was 0.241/0.115 yuan respectively, of which the overall profit of photovoltaic power was 0.241/0.115 yuan compared to 2023 The level dropped by 0.072 yuan.
Investment advice. The company has outstanding advantages as a leading power company in the country. Coal and electricity profits continue to improve, there is broad room for new energy transformation and growth, and overall profitability continues to increase. We expect the company's net profit to be 136.14/148.92/18.853 billion yuan respectively in 2024-2026, 0.87/0.95/1.20 yuan for EPS in 2024-2026, and 10.7/9.8/7.8 times for PE, respectively, maintaining a “buy” rating.
Risk warning: the installation speed falls short of expectations; the promotion of industry policies such as thermal power flexibility transformation and green power trading falls short of expectations; prices of upstream raw materials have risen.