occurrences
The company released a report for the first quarter of 2024. 2024Q1 achieved operating income of 2.127 billion yuan, a year-on-year decrease of 1.89%; realized net profit to mother of 209 million yuan, an increase of 713.14% over the previous year.
The unit maintained a high level of power generation, and improvements on the cost side led to a decrease in fuel costs on the revenue side: in terms of electricity, the number of hours used by the company's thermal power units reached 5955 hours per year in 2023, an increase of 620 hours over the previous year; completed power generation capacity of 20.664 billion kilowatt-hours, an increase of 11.62% over the previous year. The cumulative electricity consumption in Guangdong Province was +12.71% year-on-year in 2024Q1, showing a high growth rate. The company's units are of excellent quality and are expected to maintain a high level of electricity generation; in terms of electricity prices, the electricity price level of power plants in the province in 24 years may be under relative pressure due to the sharp drop in Guangdong's 2024 electricity prices and the drop in spot market prices, but the company's Meizhou Heshuyuan Power Plant enjoys environmentally subsidized electricity prices, which is expected to hedge against the overall decline in electricity prices.
Cost side: The average price of 2024Q1 Q5500 Q5500 coal in Qinhuangdao Port is about 903 yuan/ton, a year-on-year decrease of about 20%, and the company's coal combustion costs may have declined significantly. Market coal prices declined rapidly after March. As of April 30, the Q5500 coal price at Qinhuangdao Port was 829 yuan/ton, a year-on-year decrease of about 17%. As a result, we expect the pressure on the company's fuel costs to continue to decrease, and performance flexibility is expected to be further released.
The new project is progressing smoothly, and the installed capacity growth is quite flexible
By the end of 2023, the company had 3.47 million kilowatts of thermal power installed, including 1.47 million kilowatts (receiving environmentally subsidized electricity prices) units at the Meizhou Heshuyuan Power Plant and 2 million kilowatt units at the Lufeng Jiahuwan Power Plant. Currently, the company is building Lufeng Jiahu Bay units 3 and 4 on a combined scale of 2 million kilowatts. They are expected to be put into operation at the end of 2024 and the beginning of 2025, respectively. Compared with existing units, the flexibility is 57.6%. Looking at the long term, the company's Lufeng Jiahu Bay Unit 5-8 and the Meizhou Heshuyuan Power Plant Unit 7-8 are all in early preparation, with a total installed capacity of 6 million kilowatts. Compared with the existing units (including the Jiahu Bay Unit 3-4), the flexibility reached 109.7%.
The dividend ratio has increased dramatically, and shareholder returns have increased
In 2023, the company plans to distribute a cash dividend of 3.00 yuan (tax included) to all shareholders for every 10 shares, with a total profit distribution of 653 million yuan, with a dividend ratio of 73.47%. Compared with the previous period, the company's shareholder returns are expected to increase.
Profit forecast and valuation: Considering the pressure on electricity prices in Guangdong Province and the company's subsequent new installations, we adjusted the profit forecast. The company's net profit for 2024-2026 was 9.10, 13.54, and 1,419 billion yuan (the original forecast was 15.20 billion yuan and 2,442 billion yuan), up 2.45%, 48.70%, and 4.82% year-on-year respectively. The corresponding PE was 13.60, 9.15, and 8.73 times, respectively. Considering the increase in the company's dividends and the company's performance flexibility after the new installed equipment was put into operation, the “purchase” ” Ratings.
Risk warning: risk of coal price fluctuations, risk of electricity price fluctuations, risk of new project construction progress falling short of expectations, risk of investment business profits falling short of expectations, etc.