Incident: The company released its 2024 three-quarter report. 2024Q1-Q3 achieved operating income of 15.789 billion yuan, a year-on-year increase of 20.31%; net profit to mother of 1.495 billion yuan, a year-on-year decrease of 0.74%.

Wind power generation declined year-on-year, putting pressure on overall performance

By the end of 2024H1, the installed capacity of the company's wind power holding was 6.3583 million kilowatts, adding 0.0645 million kilowatts in the first half of the year. Affected by factors such as declining utilization hours and marketization, the company's power generation sector was under pressure in the short term. The first three quarters of 2024 completed 9.836 billion kilowatt-hours, a year-on-year decrease of 3.31%. The year-on-year decrease was 2.42 pct; the average feed-in price (excluding tax) was 0.44 yuan/kilowatt-hour, the same as last year.

Reserve projects are rich in resources, and the installed growth rate of wind power is expected to increase

In terms of construction, as of 2024H1, the company's wind power project capacity was 0.61 million kilowatts. Chengde Fengning Hademen Wind Hydrogen Storage Phase I, the Acheng 200MW wind power project, the Yuxian Xishuiquan wind power project, and the Yuxian Qingyazi wind power project were all constructed according to the plan; in terms of preparation, the 2024H1 company added 1.65 million kilowatts of approved wind power projects, and a total of 0.5 million kilowatts of wind power. Up to 11.2409 million kilowatts. The company strives to reach 1,000 kilowatts of new energy installed capacity by the end of the 14th Five-Year Plan, and the installed growth of wind power is expected to accelerate in the future.

Tangshan LNG Terminal has led to a significant increase in gas sales. Revenue from the natural gas sector has increased, and construction of the company's key gas pipeline network projects continues to advance, and vigorously develop natural gas end users. At the same time, the Tangshan LNG terminal has driven an increase in imported LNG sales. In the first three quarters of 2024, the company achieved 4.509 billion square meters of gas transport/sales, up 37.09% year on year, of which wholesale gas volume was 1.487 billion square meters, up 14.61% year on year; retail gas volume was 1.454 billion square meters, up 5.43% year on year; gas transfer volume was 0.557 billion square meters, up 21.20% year on year; LNG sales volume was 0.947 billion square meters, up 893.26% year on year.

The second phase of the Tangshan LNG project progressed smoothly. The external window business was gradually opened until 2024H1, and the overall progress of the second phase storage tank project of the company's Tangshan LNG project receiving station reached more than 80%. At the same time, through online/offline platforms, the company uses negotiations and bidding to provide third parties with services to open up the remaining usage capacity of receiving stations (window products). A total of 2 companies successfully ordered spot window products. This successful transaction is an initial attempt to open the Tangshan LNG terminal fairly to the outside world. In the future, window and LNG tank storage services will be launched one after another.

Profit forecast and valuation: The company's net profit for 2024-2026 is estimated to be 2.439, 3.006, and 3.864 billion yuan, with year-on-year increases of 10.47%, 23.26%, and 28.55%, respectively. The corresponding PE is 13.40, 10.87, and 8.46 times, maintaining the “increase” rating.

Risk warning: Fluctuating natural gas prices, the construction or operation status of the Tangshan LNG project falling short of expectations, changes in the new energy policy at the project site, the progress of the reserve project falling short of expectations, insufficient electricity consumption capacity at the project site, etc.