China Nuclear Power released its 2023 annual report and 2024 quarterly report. In 2023, it achieved net profit of 10.624 billion yuan, +17.91% year-on-year; in 1Q24, it achieved net profit of 3,059 billion yuan, +1.18% year-on-year.
Revenue grew steadily, and the results for 23 years were impressive. China Nuclear Power released its 2023 annual report and 2024 quarterly report. In 2023, it achieved operating income of 74.957 billion yuan, +5.15% year over year; net profit to mother of 10.624 billion yuan, +17.91% year over year; 1Q24 achieved operating income of 17.988 billion yuan, +0.53% year over year; and net profit to mother of 3,059 billion yuan, +1.18% year over year. In 2023, the company plans to pay a cash dividend of 1.95 yuan for every 10 shares, with a dividend ratio of 35.2%.
Increased electricity capacity led to revenue growth in 2023, further improving profitability. In 2023, the company's power generation capacity was 209.858 billion kilowatt-hours, +5.30% year over year; among them, nuclear power generation capacity was 186.477 billion kilowatt-hours, +0.67% year over year; new energy generation capacity was 23.382 billion kilowatt-hours, +66.44% year over year. Revenue growth was mainly driven by increased power generation. The company's annual comprehensive electricity price fell 0.78% year on year to 0.4193 yuan/kilowatt-hour. By region, Zhejiang/Jiangsu/Fujian/Hainan nuclear power feed-in tariffs were -0.002, -0.009, +0.002, and +0.004 yuan/kilowatt-hour, respectively. The company actively carried out lean management such as high-interest debt replacement. Interest expenses were reduced year on year, and exchange losses were reduced due to compounded exchange rate fluctuations, and the financial rate was -1.68 pct year over year. At the same time, due to the year-on-year reduction in early development expenses included in management expenses, the company's management rate was -1.37 pct year over year. Benefiting from good cost control, the company's net interest rate in 2023 was +3.00pct to 25.9% year-on-year.
Renewable energy capacity remains high, and the units under construction and approval are progressing in an orderly manner. 1Q24's power generation capacity was 51.09 billion kilowatt-hours, +2.8% year over year; of these, 43.674 billion kilowatt-hours of nuclear power generation, -3.13% year over year, mainly because Qinshan nuclear power was overhauled more than in the same period last year, leading to a decrease in power generation; and 7.416 billion kilowatt-hours of new energy generation, +60.66% year over year. By the end of March 2024, the company had an installed capacity of 21.346 million kilowatts of new energy, including 7.3326 million kilowatts of wind power and 140.80 million kilowatts of photovoltaics. 1Q24 added 2,824,700 kilowatts of new energy installed capacity, +433.1% year-on-year. It is expected that against the backdrop of declining fan and component costs, the company will maintain a high growth rate of new energy installed throughout the year.
Profit forecasting and valuation. Currently, the company has 15 nuclear power units under construction and approval, with an installed capacity of 17.565 million kilowatts. Of these, the Zhangzhou Unit 1 is expected to be put into operation in 2024, which will be the main increase in the company's performance this year; the installed capacity of new energy sources under construction is 14.262,600 kilowatts. As the units are put into operation one after another, the performance is expected to continue to be released. The company's net profit for 2024-2026 is estimated to be 116.45, 12.523, and 13.497 billion yuan, up 9.6%, 7.5%, and 7.8% year-on-year; PE corresponding to the current stock price is 15.0x, 14.0x, and 13.0x, respectively, maintaining a “highly recommended” rating.
Risk warning: Risk of safe and stable operation of nuclear power plants, falling short of expectations in project construction, and risk of falling electricity prices.