Description of the event
The company released its 2024 quarterly report, achieving operating income of 140,154 billion yuan, an increase of 5.15% year on year; attributable net profit of 3,045 billion yuan, up 0.79% year on year; and net profit without deduction of 3,021 billion yuan, an increase of 1.32% year on year.
Incident comments
2024Q1, the company's revenue performance grew steadily. In 2024Q1, the company achieved operating income of 140,154 billion yuan, an increase of 5.15% year on year; attributable net profit of 3,045 billion yuan, an increase of 0.79% year on year; after deducting net income of 3,021 billion yuan, an increase of 1.32% year on year.
The company's gross margin declined. Affected by net exchange earnings, the expense ratio declined year-on-year. The company's comprehensive gross profit margin for 2024Q1 was 11.79%, down 0.41pct year on year. In terms of cost ratio, the company's expense ratio for the 2023 period was 7.06%, down 0.97pct year on year. Among them, sales, management, R&D, and financial expense ratios changed 0.03, 0.09, -1.16 pct year on year to 0.23%, 3.01%, 2.27%, and 1.54%, respectively. The reduction in financial expenses was mainly due to net exchange earnings in Q1 this year and net exchange losses in the same period last year. Investment income decreased by 36.54% year on year, mainly due to the decline in investment income of joint ventures. Asset impairment losses increased by 409 million yuan, an increase of 3617.36% over the previous year, mainly due to increased preparation for impairment of contract assets. Credit impairment losses increased by 397 million yuan, an increase of 35.98% over the previous year, mainly due to an increase in the size of accounts receivable and changes in the age structure. Taken together, the company's net vested interest rate in 2023 was 2.17%, down 0.09pct year on year, and 2.16% after deducting non-attributable net interest rate, down 0.08pct year on year.
Q1 Net cash outflow from operations increased, and the balance to liability ratio increased. The company's net cash flow from operating activities in 2024Q1 was 39.03 billion yuan, with a year-on-year increase of 6.039 billion yuan, a year-on-year increase of 96.35%, an increase of 8.66 pcts; the company's balance ratio increased 0.45 pcts to 78.22% year on year, and the number of accounts receivable turnover days increased 1.38 to 72.74 days year on year.
Continued promotion of the dual-carbon policy will drive growth, and new energy+pumped storage will form a future growth point. 1) In terms of policy, the 2021 State Council's “Pre-2030 Carbon Peak Action Plan” emphasizes vigorously developing new energy, comprehensively promoting large-scale development and high-quality development of wind power and solar power generation, and speeding up the construction of wind power and photovoltaic power generation bases. By 2030, the total installed capacity of wind power and solar power generation will reach more than 1.2 billion kilowatts, and the wind power photovoltaic market has great potential for growth. The Energy Administration issued the “Medium- and Long-Term Development Plan for Pumped Energy Storage (2021-2035)”. By 2025, the total production scale of pumped storage will be over 62 million kilowatts; by 2030, the total production scale will be around 120 million kilowatts. 2) The company attaches importance to optimizing the energy and power business, seizing new energy markets such as pumped storage, photovoltaics, wind power, etc., and actively transitioning to clean and low-carbon energy. By the end of 2023, the company controlled a grid-connected installed capacity of 27.885 million kilowatts, of which: wind power installed capacity was 8.428 million kilowatts, up 9.97% year on year; installed solar power generation was 7.721 million kilowatts, up 15.35% year on year; hydropower installed capacity was 6.856 million kilowatts, up 15.35% year on year; independent energy storage The installed capacity was 553,000 kilowatts, an increase of 1006.00% year over year. Clean energy accounts for 84.6%. , continue to be optimistic about future operator transformation opportunities. The company is expected to achieve net profit of 14.9.94 billion yuan and 17.135 billion yuan in 2024 and 2025, corresponding to the current closing price PE of 6.17 and 5.40 times, respectively, with a “buy” rating.
Risk warning
1. Policy progress falls short of expectations;
2. Prices of raw materials fluctuate greatly.