维持“增持”评级：考虑到公司1~3Q24 电量承压，下调2024~2026年EPS 至0.58/0.62/0.66 元（原0.62/0.67/0.72 元），参考行业可比公司估值，考虑到公司在建及储备装机充裕，长期价值可期，给予2025年20 倍PE，下调目标价至12.40 元（原12.73 元），维持“增持”评级。Introduction to this report:
3Q24 The volume and price of the electricity business fell sharply, and the increase in expenses dragged down performance; the company is under construction and has sufficient reserves and installed capacity, and long-term value can be expected.
Key points of investment:
Maintaining the “Overload” Rating: Considering that the company's power supply is under pressure from 1 to 3Q24, the EPS was lowered to 0.58/0.62/0.66 yuan (originally 0.62/0.67 yuan) from 2024 to 2026, refer to industry comparable company valuations. Considering that the company is under construction and has sufficient reserves and installed capacity, long-term value can be expected, the target price was lowered to 12.40 yuan (originally 12.73 yuan), and the target price was lowered to 12.40 yuan (original 12.73 yuan).
The results were generally in line with expectations. The company's revenue from 1 to 3Q24 was 56.99 billion yuan, +1.6% year on year; net profit to mother was 8.93 billion yuan, -4.2% year over year. 3Q24 revenue was 19.54 billion yuan, -1.2% YoY; net profit to mother was 3.05 billion yuan, -7.1% YoY. The performance was basically in line with expectations.
The volume and price of the electricity business have plummeted, and the increase in costs has dragged down performance. The company's 3Q24 gross profit margin was 46.8%, -0.9 ppts year on year; net profit was 5.47 billion yuan, -7.5% year over year. We believe that the decline in the company's 3Q24 performance is mainly due to the sharp drop in the volume and price of the power business: the company's 3Q24 power generation capacity was 55.1 billion kilowatt-hours, -0.4% year over year, of which nuclear power generation capacity was 46.5 billion kilowatt-hours, -5.5% year over year, mainly affected by increased maintenance time for Fuqing Unit 4; new energy generation capacity was 8.6 billion kilowatt-hours, +40.1% year over year, mainly benefiting from the increase in installed capacity (as of the end of 3Q24, the company's new energy installed capacity was 24.2 GW, +55.2% year over year). According to the company's announcement, the company's market-based electricity prices fell year-on-year from 1 to 3Q24. 2) Increased financial expenses: 3Q24, the company's financial expenses ratio was 9.3%, +1.7 ppts year-on-year.
There is plenty of equipment under construction and reserves, and long-term value can be expected. In August 2024, the first phase of the Jiangsu Xuxu project was approved by the State Council. The project plans to build 2 Hualong 1 units and 1 high-temperature air-cooled reactor nuclear power unit, with a total installed capacity of 3.1 GW. By the end of 3Q24, the company had increased the number of units under construction and approved for construction to 18, with a total installed capacity of 20.6 GW; the project under construction was 202.6 billion yuan, +50.2% over the same period last year. The 3Q24 company paid 19.97 billion yuan in cash for the purchase and construction of fixed assets, intangible assets and other long-term assets, +28.8% over the same period last year. Referring to the nuclear power unit construction cycle, the units under construction and approved by the company are expected to be put into operation one after another from 2025 to 2030; of these, 2027 is the peak operation period, and 5 units are expected to be put into operation. Considering that the number of hours nuclear power is used and electricity prices are relatively stable, as the installed equipment under construction progresses steadily, we believe that the company has plenty of room for long-term growth.
Risk warning: The progress of nuclear power production is lower than expected, nuclear power prices are lower than expected, etc.
