Description of the event
The company released a report for the first quarter of 2024: in the first quarter of 2024, the company achieved operating income of 65.367 billion yuan, an increase of 0.15% over the previous year; realized net profit of 4.596 billion yuan to mother, an increase of 104.25% over the previous year.
Incident comments
The amount of coal power has grown steadily, and coal prices have declined, and thermal power profits have recovered markedly. In the first quarter, the country's electricity consumption maintained steady growth, driving a year-on-year increase in electricity generation. During the heating season, the company's coal machines maintained a high load rate, thanks to which the company completed 92.267 billion kilowatt-hours of feed-in electricity in the first quarter, an increase of 3.05% over the previous year. Among them, the feed-in electricity volume of Jiangsu Province, Shanghai City, Fujian Province and Yunnan Province increased by 26.05%, 22.13%, 34.81%, and 46.57%, respectively, which is the main reason for the year-on-year increase in the company's coal power generation capacity. In addition, the company's combustion engines completed 7.154 billion kilowatt-hours of feed-in electricity in the first quarter, a decrease of 1.73% over the previous year. In terms of electricity prices, the average feed-in electricity price for the company's domestic power plants in the first quarter was 497.97 yuan/megawatt-hour, down 3.99% from the previous year. It is expected that the company's thermal power prices may also loosen to a certain extent, but the decline in thermal power prices is expected to be less than the decline in overall electricity prices. The main reason is that the increase in the share of affordable new energy electricity in the first quarter will drive a correction in overall electricity prices.
Therefore, overall, the company's thermal power business revenue is expected to remain stable, driven by the year-on-year increase in electricity volume. In terms of cost, coal prices fell rapidly in the first quarter. The Q5500 Q5500 coal liquidation price in the first quarter was 901.74 yuan/ton, a year-on-year decrease of 20.12%. Overall, against the backdrop of the revenue side remaining stable and costs falling significantly, the company's total profit for the first quarter reached 2,825 billion yuan, a significant improvement from the loss of 0.7 billion yuan in the same period last year. The total profit from coal power generation reached 0.0306 yuan/kilowatt-hour, an increase of 0.0314 yuan/kilowatt-hour over the previous year; the total profit from the combustion engine business reached 536 million yuan, an increase of 64.34% over the previous year.
New energy sources increased steadily overseas, and the company's performance achieved a high increase. In the first quarter of 2024, the company added 8691 million kilowatts of wind power and 736,800 kilowatts of photovoltaic installations. The total installed capacity of the company's new energy is expected to reach 302,169 million kilowatts, an increase of 45.92% over the previous year. Driven by rapid growth in installed capacity, the company's wind power completed feed-in capacity of 10.028 billion kilowatt-hours in the first quarter, an increase of 24.08%; PV completed feed-in power of 3.222 billion kilowatt-hours, an increase of 73.73% over the previous year, but lower than the 98.56% year-on-year growth rate of PV installed capacity. Driven by rapid growth in electricity volume, the company's total wind power business profit in the first quarter was 2,414 billion yuan, up 25.41% year on year; total PV business profit reached 370 million yuan, up 6.99% year on year. The main reason why the total profit growth rate of the photovoltaic business is significantly lower than the growth rate of electricity consumption may be due to a drop in the number of hours of PV utilization and the drag down of market-based electricity prices. Overall, the company's total domestic business profit reached 6.145 billion yuan, an increase of 3,641 billion yuan over the previous year. Furthermore, driven by the simultaneous improvement in the operating performance of participating companies, the company's investment income reached 381 million yuan in the first quarter, an increase of 150 million yuan over the previous year. Meanwhile, the company's total profit for the first quarter reached 6.998 billion yuan, an increase of 3.869 billion yuan over the previous year. That is, the main source of the company's performance growth was domestic business, and overseas business also maintained a high level of stability. Overall, driven by the steady recovery of the main business performance, the company achieved net profit of 4.596 billion yuan in the first quarter, an increase of 104.25% over the previous year.
Investment advice: According to the company's latest financial data, we adjusted the company's profit forecast. The company's EPS for 2024-2026 is 0.98 yuan, 1.07 yuan, and 1.17 yuan respectively, corresponding to PE of 9.55 times, 8.69 times, and 7.97 times, respectively.
Maintain the company's “buy” rating.
Risk warning
1. There is a risk that electricity supply and demand will deteriorate;
2. There is an unseasonal risk in coal prices.