Description of the event
The company released its 2023 annual report and 2024 quarterly report: in 2023, the company achieved operating income of 74.957 billion yuan, an increase of 5.15% over the previous year, and realized net profit of 10.624 billion yuan, an increase of 17.91% over the previous year. The first quarter of 2024 achieved operating income of 17.988 billion yuan, an increase of 0.53% year on year, and realized net profit to mother of 3,059 billion yuan, an increase of 1.18% over the previous year.
Incident comments
Continued cost control and efficiency, with excellent performance throughout the year. In 2023, the company's annual nuclear power generation capacity was 186.477 billion kilowatt-hours, up 0.67% year on year; the cumulative feed-in electricity volume was 174.458 billion kilowatt-hours, up 0.72% year on year. Thanks to the company's excellent ability to control the unit, the company's nuclear power performance exceeded the 183.5 billion kilowatt-hours proposed in the power generation plan. In terms of new energy, the company added 5.9852 million kilowatts of new energy installed in 2023, successfully completing the annual target of new installed capacity. Driven by the rapid expansion of installed capacity, the company's total annual energy generation capacity was 23.382 billion kilowatt-hours, an increase of 66.44% over the previous year. Among them: PV power generation capacity was 12.478 billion kilowatt-hours, an increase of 66.14% over the same period last year, and wind power generation capacity was 10.904 billion kilowatt-hours, an increase of 66.78% over the same period last year. Driven by steady growth in electricity volume, the company achieved annual revenue of 74.957 billion yuan, up 5.15% year on year; gross margin was 44.62%, down 1.01 percentage points year on year. Due to the year-on-year decrease in early development expenses, which include management expenses, the company's annual management expenses were 3.828 billion yuan, a year-on-year decrease of 17.11%. Furthermore, with the steady progress of the company's high-interest debt replacement, the company's annual financial expenses were 7.302 billion yuan, a decrease of 10.35% year on year. On the revenue side, the company achieved net profit of 10.624 billion yuan for the whole year, up 17.91% year on year; of these, net profit from shareholders of listed companies contributed 2,059 billion yuan, an increase of 66.57% year on year; net profit from nuclear power and other businesses was 8.565 billion yuan, up 10.17% year on year.
Minor repairs to nuclear power disrupt electricity performance, and high increases in green power combined with cost control guarantee steady performance. In the first quarter of 2024, the power generation capacity of the company's nuclear power units was 43.674 billion kilowatt-hours, down 3.13% from the previous year. Although electricity volume declined somewhat, power generation operations were in line with the annual production plan. In fact, unit maintenance is a normal operating schedule for the whole year. The base problems caused by maintenance can disrupt short-term performance, but maintenance has been fully incorporated into the annual business plan. In terms of new energy, as of the end of the first quarter of 2024, the Company's New Energy Holdings had an installed capacity of 21.346 million kilowatts. Compared to the end of 2023, new energy added 2,824,700 kilowatts of installed capacity. In the first quarter alone, the number of new installed capacity reached 47% of the total installed capacity in 2023, and the installed capacity of new energy is expanding at an accelerated pace. Thanks to this, the company's new energy generation capacity in the first quarter was 7.416 billion kilowatt-hours, an increase of 60.66% over the same period last year. The rapid increase in new energy power has eased the downward pressure on nuclear power due to maintenance, and the company's power generation capacity increased by 2.80% year on year. Since most of the new new energy projects are affordable, and electricity prices are lower than existing nuclear power and new energy projects, the company's revenue for the first quarter was 17.988 billion yuan, up 0.53% year on year; gross profit was 8.845 billion yuan, down 0.84% year on year. However, the company insisted on controlling costs and increasing efficiency. Financial expenses for the first quarter were 1,686 billion yuan, down 10.07% year on year; R&D expenses were 57 million yuan, a sharp drop of 75.50% year on year. The sharp drop in expenses during the period effectively reversed the downward trend in gross profit. The company achieved net profit of 3,059 billion yuan in the first quarter, an increase of 1.18% over the previous year.
Investment advice: According to the latest financial data, we expect the company's EPS in 2024-2026 to be 0.62 yuan, 0.68 yuan, and 0.75 yuan, respectively, and the corresponding PE will be 15.01 times, 13.60 times, and 12.35 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 sunshine resources fall short of the expected risk.