Core views

In the first three quarters of 2024, the company achieved operating income of 56.986 billion yuan, an increase of 1.60% year on year; net profit to mother was 8.934 billion yuan, a decrease of 4.22% year on year. The year-on-year increase in the company's revenue was mainly due to the year-on-year increase in wind and solar power generation. The year-on-year decline in net profit due to the decline in market-based electricity prices was mainly due to a decrease in market-based electricity prices, and the increase in revenue was less than the increase in costs. As of the end of September 2024, the company's controlled installed capacity was 47.897 million kilowatts, of which the installed capacity of nuclear power, wind power, photovoltaics and independent energy storage power plants was 2375, 783.12, 1631.58, and 1,32.9 million kilowatts, respectively. From January to September 2024, the company's nuclear power, wind power and photovoltaic power generation capacity changed -2.74%, +45.91%, and +50.10% year-on-year. The year-on-year decline in nuclear power generation was mainly due to the year-on-year increase in the number of maintenance days for the overall unit, compounded by the impact of typhoon “Morocco” and minor unit repairs. At the same time, thanks to the increase in the installed capacity of new energy sources, the company's new energy generation capacity increased year-on-year. Overall, approval of nuclear power projects is currently highly certain. The company's installed nuclear power capacity is expected to continue to grow, and overall business performance is expected to improve steadily.

occurrences

The company released its report for the third quarter of 2024

In the first three quarters of 2024, the company achieved operating income of 56.986 billion yuan, a year-on-year increase of 1.60%; net profit of 8.934 billion yuan, a year-on-year decrease of 4.22%; net profit after deducting 8.866 billion yuan, a year-on-year decrease of 3.02%; a single-quarter net profit of 3.052 billion yuan, a year-on-year decrease of 7.10%; achieved a weighted return on net assets of 9.57%, a year-on-year decrease of 1.14 percentage points; achieved basic earnings per share of 0.47 yuan/share, a year-on-year decrease of 4.22%; 2.88%

Brief review

The growth of the landscape led to an increase in revenue. In the first three quarters of 2024, the company achieved operating income of 56.986 billion yuan, an increase of 1.60% year on year; net profit to mother was 8.934 billion yuan, a decrease of 4.22% year on year. The year-on-year increase in the company's revenue was mainly due to the year-on-year increase in the amount of new energy generation. The year-on-year decline in net profit to mother was mainly due to the decline in market-based electricity prices, and the increase in revenue was less than the increase in costs. In terms of the period expense ratio, 2024Q3 company's sales expense ratio, management expense ratio, R&D expense ratio, and financial expense ratio were 0.08%, 4.45%, 1.33%, and 9.28%, respectively, with year-on-year changes of -0.04, +0.46, -0.52, and -0.35 percentage points. In the first three quarters, the company's financial expenses were 5.289 billion yuan, a year-on-year decrease of 2.06%. In terms of cash flow, in the first three quarters of 2024, net cash flow from the company's operating activities was 32.845 billion yuan, down 4.36% year on year; net cash flow from investment activities was -61.486 billion yuan, up 47.87% year on year; net cash flow from financing activities was 28.537 billion yuan, up 259.17% year on year.

The typhoon affected superimposed unit maintenance, and nuclear power generation declined year-on-year

As of the end of September 2024, the company's controlled installed capacity was 47.897 million kilowatts, of which the installed capacity of nuclear power, wind power, photovoltaics and independent energy storage power plants was 2375, 783.12, 1631.58, and 1,32.9 million kilowatts, respectively. At the same time, the company holds 18 nuclear power units under construction and approved to be built, with an installed capacity of 20.641 million kilowatts; it holds the installed capacity of 15.0452 million kilowatts of New Energy, including 3.1977 million kilowatts of wind power and 11.8475 million kilowatts of photovoltaics. In terms of feed-in power, the company completed 160.388 billion kilowatt-hours of electricity generation in the first three quarters, up 2.70% year on year; feed-in power generation was 151.121 billion kilowatt-hours, up 2.92% year on year. Among them, the company's nuclear power, wind power and photovoltaic power generation capacity was 1356.38, 111.09, and 13.641 billion kilowatt-hours, respectively, with year-on-year changes of -2.74%, +45.91%, and +50.10%. The year-on-year decline in the company's nuclear power generation was mainly due to the year-on-year increase in the number of maintenance days for the overall unit, compounded by the impact of typhoon “Morocco” and minor unit repairs. Among them, Fuqing Nuclear Power and Hainan Nuclear Power Generation fell 11.10% and 6.54% year on year. At the same time, thanks to the increase in the installed capacity of new energy sources, the company's new energy generation capacity increased year-on-year.

Controlling shareholders complete plans to increase holdings and maintain “buy” ratings

Recently, China Nuclear Power Group, the controlling shareholder of the company, completed a plan to increase its holdings of the company. Using centralized bidding, it completed a total increase of 17.7753 million shares, accounting for 0.09% of the company's total issued shares. The increase in holdings was about 129.49 million yuan. The increase in holdings came from its own capital, highlighting the controlling shareholders' confidence in the company's development. Overall, at present, China's nuclear power project approval is highly certain. The company's installed nuclear power capacity is expected to continue to grow, and overall business performance is expected to improve steadily. We expect the company's net profit from 2024 to 2026 to be 10.674 billion yuan, 11.658 billion yuan, and 12.407 billion yuan respectively, corresponding to EPS of 0.52 yuan/share, 0.57 yuan/share, and 0.60 yuan/share, respectively.

Risk analysis

There is a risk that nuclear power units will fall short of expectations: nuclear power equipment requires continuous innovation, updated and iterated technology lacks standardization and scale, more tests need to be completed before production is put into operation, and there is great uncertainty about the goals set for production. If the company's nuclear power equipment is installed and put into production less than expected, the company's performance growth will slow down accordingly.

The risk that nuclear power prices are expected to fall; currently, market-based trading electricity prices for nuclear power mainly anchor coal power supply prices. If electricity prices in the coal power market fall, then there is a risk that electricity prices traded in the nuclear power market will fall.

Wind and wind installation risks falling short of expectations: The company's new energy expansion target is set high, and there is a risk that project returns will fall short of expectations or that industry installed equipment demand will decline, which may affect the company's revenue and profit levels.