Description of the event
The company released its 2024 quarterly report: in the first quarter of 2024, the company achieved operating income of 12.789 billion yuan, a year-on-year decrease of 1.97 million yuan; realized net profit to mother of 126 million yuan, an increase of 42.80% over the previous year.
Incident comments
The growth rate of unit expansion and electricity capacity remained high, and falling electricity prices limited revenue performance. In the first quarter of 2024, the company added 1.776,600 kilowatts of installed capacity through self-construction and acquisition, including 1.152 million kilowatts of gas and electricity, 600,000 kilowatts of wind power, and 24,600 kilowatts of photovoltaic power generation. Thanks to the expansion of scale and steady improvement in demand, the company's consolidated report for the first quarter of 2024 generated 28.202 billion kilowatt-hours, up 7.20% year on year; of these, coal power completed 21.48 billion kilowatt-hours, up 0.86% year on year, gas power completed 4.667 billion kilowatt-hours, up 32.02% year on year, wind power completed 1,481 billion kilowatt-hours, up 11.94% year on year, hydropower completed 61 million kilowatt-hours, up 22.00% year on year, and biomass completed 157 million kilowatt-hours, up 9.03% year on year. PV completed 418 million kilowatt-hours, compared to 19 million kilowatt-hours in the same period last year. Although wind power and photovoltaic revenue from new energy sources increased by 196 million yuan year on year in the context of scale expansion, due to the year-on-year decline in the price of Changxie electricity in Guangdong Province, the company continued to put pressure on the operating revenue of the company's thermal power business in the context of a year-on-year increase in electricity volume, so the company achieved operating income of 12.789 billion yuan in the first quarter, a decrease of 1.97% year on year.
Costs were significantly repaired by falling coal prices, and first-quarter results increased year-on-year. The coal supply and demand situation relaxed in the first quarter, and coal prices continued to decline. The average market price of Q5500 thermal coal in Qinhuangdao Port in the first quarter was 901.74 yuan/ton, a year-on-year decrease of 20.1%. The continued decline in coal prices will significantly explain the pressure on the cost side of thermal power. In the first quarter, the company's fuel costs were 8.592 billion yuan, down 8.84% year on year, and operating costs were 11.362 billion yuan, down 5.76% year on year. The cost reduction was higher than the revenue decline, and the company's overall profitability improved. In addition, the company's R&D expenses in the first quarter were 82 million yuan, a year-on-year decrease of 55.16%. In terms of profit reduction factors, as the size of the company expanded, the company's management expenses expanded year-on-year. Management expenses for the first quarter were 367 million yuan, up 39.69% year on year. Since the company's participation in the coal company in Shanxi Guangdong Electric Power Energy is expected to decrease in the context of falling coal prices, the investment income for the first quarter was 126 million yuan, a decrease of 40.19% year on year. Overall, with the contribution of recovering marginal thermal power and new energy business performance, the company's net profit for the first quarter was 126 million yuan, an increase of 42.80% over the previous year.
Investment advice and valuation: According to the latest financial data, we adjusted the company's profit forecast. We expect the company's EPS for 2024-2026 to be 0.27 yuan, 0.37 yuan, and 0.47 yuan, respectively, corresponding PE of 20.69 times, 15.38 times, and 11.93 times, respectively, maintaining the company's “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 lighting resources fall short of expected risks.