Introduction to this report:
1Q24's investment income drives performance growth, and new energy installations are expected to continue to grow as capital expenditure accelerates.
Key points of investment:
Maintain the “Overweight” rating: Maintain the 2024-2026 EPS to 0.50/0.56/ 0.63 yuan. Maintain the target price of 6.50 yuan and maintain the “Overweight” rating.
1Q24 results exceeded expectations. The company's 1Q24 revenue was 45.6 billion yuan, +0.5% year on year; net profit to mother was 1.78 billion yuan, +85.0% year on year, reversing losses month-on-month (4Q22 net profit to mother - 0.2 billion yuan), which exceeded our previous expectations.
Investment returns drive performance growth, and the amount of feed-in electricity has been rising steadily. The company's high performance in 1Q24 mainly benefited from: 1) the investment income of the 1Q24 joint venture was 450 million yuan, +550 million yuan over the previous year; 2) Baode Shendong Power Plant was no longer included in the scope of the company's consolidated statements after the current bankruptcy was handed over to the manager, increasing the company's net profit of 200 million yuan to the mother. The company's 1Q24 feed-in electricity capacity was 10.7 billion kilowatt-hours, +5.0% year-on-year (including 860/77.3/ 51.4%/1.80 billion kilowatt-hours, +4.2%/-3.2%/+11.6%/+136%/); the average feed-in tariff for the same period was 0.456 yuan/kilowatt-hour, -1.6% year over year. 1Q24 The company's financial expenses were 1.64 billion yuan, -5.3% year-on-year.
Capital expenditure is accelerating, and the installed capacity of new energy sources continues to grow. As of the end of 1Q24, the company's wind/photovoltaic installed capacity was 9.3/9.2 GW, +24.6/ +154% year-on-year. In 2024, the company plans to obtain more than 14.0 GW of new energy resources, put into production 8.6 GW of new energy installed equipment, and add 0.6 GW of new energy installed in 1Q24. The 1Q24 company paid 11 billion yuan in cash for the purchase and construction of fixed assets, intangible assets and other long-term assets, +55.4% year-on-year. We expect that the company's new energy installations will continue to grow in the future, supported by high capital expenditure and sufficient reserve resources.
Risk warning: Renewable energy profits fall short of expectations, electricity prices fall short of expectations, large depreciation, etc.