Incident: The company released its 2024 quarterly report. 2024Q1 achieved operating income of 7.907 billion yuan, an increase of 20.55% over the previous year, and realized net profit to mother of 832 million yuan, a decrease of 0.89% over the previous year.
Wind power: The proportion of market-based transactions has increased significantly, and the installed capacity is expected to maintain rapid growth. By the end of 2023, the installed capacity of the company's wind power holding was 6.2938 million kilowatts, up 8.29% year on year. Affected by factors such as marketization, the company's power generation sector was under pressure in the short term. 2024Q1 completed 4.117 billion kilowatt-hours of power generation, up 0.27% year on year. Among them, the market-based transaction ratio reached 35.67%, an increase of 3.59 pct; the average feed-in electricity price (excluding tax) was 0.43 yuan/kilowatt-hour, down 2.48% year on year.
Looking forward to the future, on the one hand, the company's market-based transaction ratio has reached a high level, and the overall electricity price level and profitability are expected to stabilize; on the other hand, the company strives to reach 1,000 kilowatts of new energy installed capacity by the end of the “14th Five-Year Plan”. By the end of 2023, the company's wind power capacity was 574,500 kilowatts, an increase of 86.88% over the previous year; the company's project reserves were sufficient. The growth of installed wind power is expected to accelerate.
Natural gas: The scale of end users is expanding, and retail gas volume increases revenue in the natural gas sector. The construction of the company's key gas pipeline network projects continues to advance, and vigorously develops natural gas end users. In 2023, 8,8036 new downstream users were added, and the total number of users reached 64,7084, an increase of 15.75% over the previous year. 2024Q1 achieved gas transport/sales volume of 2,230 billion cubic meters, an increase of 33.86% year on year, of which wholesale gas volume reached 966 million cubic meters, up 10.58% year on year; retail gas volume reached 638 million cubic meters, up 20.12% year on year. The increase in gas sales led to an increase in overall revenue in the natural gas sector, which significantly supported the company's overall performance.
The first phase of the Tangshan LNG project was successfully put into operation, leading to a significant increase in LNG gas volume. The overall progress of the Tangshan LNG project is progressing smoothly. The first phase of the project was put into operation on June 21, 2023, and the second phase of the project is progressing steadily. The commissioning of the first phase of the project led to a significant increase in the company's LNG sales volume. 2024Q1's LNG sales volume reached 363 million cubic meters, an increase of 46589.68% over the previous year. With the commissioning of the next phase of the project and the signing of more overseas gas delivery contracts, its profit contribution level is expected to continue to grow.
Profit forecast and valuation: Considering the slow growth rate of the company's new energy installed capacity in 2023, we adjusted the profit forecast. The company's net profit for 2024-2026 is 24.38, 30.05, and 3.864 billion yuan (the original forecast was 33.02 billion yuan and 37.49 billion yuan), up 10.46%, 23.25%, and 28.56% year-on-year respectively. Corresponding PE is 15.08, 12.23, and 9.52 times. Considering the increase in the company's dividend ratio in 23, shareholder returns are expected to increase. Maintain an “Overweight” rating.
Risk warning: Fluctuating natural gas prices, the construction or operation status of the Tangshan LNG project falling short of expectations, changes in the new energy policy at the project site, the progress of the reserve project falling short of expectations, insufficient electricity consumption capacity at the project site, etc.