Incident: Recently, the company disclosed its 2024 quarterly report. 24Q1 achieved revenue of 65.367 billion yuan, a year-on-year increase of 0.15%; realized net profit of 4.596 billion yuan to mother, an increase of 104.25% over the previous year.
Comment:
24Q1 achieved a significant year-on-year increase in profits, mainly due to a year-on-year decrease in fuel costs and a year-on-year increase in electricity volume for domestic business units. 24Q1's various operating power plants in China completed a total of 113,036 billion kilowatt-hours of feed-in electricity, an increase of 5.63% year-on-year, mainly due to (1) the steady increase in electricity consumption across the country, driving a year-on-year increase in power generation; (2) during the heating season, the company's coal machines maintained a high load rate, and coal engine power generation increased year on year; (3) the company continued to promote green and low-carbon transformation. New energy generation capacity increased rapidly year on year.
24Q1's profitability mainly benefits from lower unit fuel costs, etc. 24Q1's gross margin was 16.07%, up 5.99 percentage points year on year; net interest rate was 8.93%, up 5.15 percentage points year on year. The significant increase in the company's profitability mainly benefited from the year-on-year decline in fuel costs for domestic business units, etc. As of May 24, the average liquidation price of thermal coal (Q5500) in Qinhuangdao Port since this year was 876 yuan/ton, a decrease of 19% over the previous year.
The company has a large thermal power installation and advanced equipment. By the end of March 2024, the installed capacity of the company's controllable power generation was 137.12 GW, of which the installed capacity of coal engines was 93.14 GW, the installed capacity of combustion engines was 13.23 GW, and the installed scale of thermal power generation was large. More than 55% of the company's coal-fired units are large units of 600,000 kilowatts or more, including 16 million-kilowatt ultra-supercritical units that have already been put into operation, and are equipped with advanced equipment.
The green and low-carbon transition continues to advance. 24Q1 added 0.87GW/0.74GW of wind/photovoltaic grid-connected installations and shut down Unit 3 (0.14GW) of Huaneng Linyi Power Generation Co., Ltd.
The share of low-carbon clean energy installations rose from 31.24% at the end of 2023 to 32.07% at the end of March 2024, and the green and low-carbon transition continues to advance.
Investment advice: The company's EPS is expected to be 0.78 yuan, 0.89 yuan, and 0.96 yuan respectively in 2024-2026, corresponding PE is 12 times, 10 times, and 9 times, respectively, maintaining the company's “buy” rating.
Risk warning: Policy progress falls short of expectations; economic development falls short of expectations; risk of feed-in tariff fluctuations; risk of thermal coal price fluctuations; new energy projects fall short of expectations, etc.