occurrences

The company released its 2024 semi-annual report. 2024H1 achieved revenue of 37.441 billion yuan, +3.15% year over year, realized net profit of 5.882 billion yuan, -2.65% year over year, and 2024Q2 achieved revenue of 19.453 billion yuan, +5.70% year over year, and realized net profit to mother of 2.823 billion yuan, or -6.50% year over year.

Increased installed capacity leads to increased power generation

As of 2024H1, the company's nuclear power holding was operating 25 installed machines, with a scale of 23.75 million kilowatts, and 22.3704 million kilowatts of new energy (+7.9183 million kilowatts compared to the previous year). The increase in installed capacity led to an increase in power generation. 2024H1 achieved a power generation capacity of 105.295 billion kWh, with a feed-in capacity of 99.295 billion kWh, and the same ratio of nuclear power generation in terms of power generation - 1.24%, new energy +52.87% YoY.

Unit maintenance, a slight decrease in marketable electricity prices affected the company's profits. On the one hand, it may be related to nuclear power unit overhauls. On the one hand, 2024H1 completed 10 overhauls. On May 13, Sanmen Unit 1 began a fourth overhaul. At the same time, Fuqing Unit 4 underwent minor repairs during the reporting period. In terms of power generation, Sanmen Nuclear Power and Fuqing Nuclear Power were -6.04%/-7.62% year-on-year, respectively. On the other hand, the market-based electricity volume and electricity prices for 24H1 nuclear power have declined, and new energy projects are facing factors such as large increases in revenue and low profit growth.

There are plenty of aircraft under construction, and the increase in social security guarantees shows confidence

As of 2024H1, the company's nuclear power plants are under construction and approval is 17.565 million kilowatts (15 units). On August 19, 2023, the National Assembly approved Jiangsu Xuwei Units 1 and 2 and high-temperature air-cooled reactors. A total of 18 units (18 units) are under construction and approval. Among them, Zhangzhou Unit 1 and Unit 2 are expected to be commercialized in 2024/2025. The company's nuclear power and new energy units are expected to contribute significantly to long-term performance.

2024H1 China Core plans to issue shares to specific targets. Among them, China Core Group plans to subscribe for 2 billion yuan, and the Social Security Foundation plans to subscribe for 12 billion yuan. The Social Security Fund becomes a related party of the company, demonstrating confidence in the company's long-term development.

Profit Forecasts, Valuations, and Ratings

The company's installed capacity is growing steadily, and we are optimistic about the long-term development of leading nuclear power companies. We expect the company's revenue in 2024-2026 to be 80.891/88.445/95.928 billion yuan, respectively, +7.92%/+9.34%/+8.46% year-on-year; net profit to mother is 10.982/12.105/13.305 billion yuan, with year-on-year growth rates of +3.37%/+10.22%/+9.92%, 3-year CAGR of 7.79%, EPS 0.58/0.64/0.70 yuan/share, respectively, and the corresponding PE was 17.7/16.0/14.6 times, respectively, maintaining the “buy” rating.

Risk warning: 1) Installation progress falls short of expectations, 2) market-based electricity price risk, 3) New energy consumption issues