剔除投资收益和减值损失的影响，我们测算3Q24 公司整体度电净利yoy+13%至0.093 元、扭转1Q/2Q 同比下滑趋势。考虑到市场化交易和风光电量占比变化的因素，我们预计4Q24 量利趋势有望延续。Three Gorges Energy released its three-quarter report: 3Q24 achieved revenue of 6.701 billion yuan (yoy +20%, qoq -6.4%) and net profit of 1.055 billion yuan (yoy +15%, qoq -35%). 1-3Q24 achieved revenue of 21.76 billion yuan (yoy +13%), net profit of 5.093 billion yuan (yoy -6.3%), deducting non-net profit of 5.089 billion yuan (yoy -4.9%). The company's net profit for the third quarter surpassed our expectations for mid-September (5.64 to 0.624 billion yuan), thanks to a significant year-on-year increase in power generation. 3Q24 power generation increased year-on-year, and net electricity profit stopped falling and rebounded. National reimbursements increase operating cash flow, and the risk of impairment is expected to be mitigated. Maintain a “buy” rating.
3Q24 power generation increased year-on-year, and net electricity profit stopped falling and rebounded
The company's newly put into operation contributed to the increase in the third quarter, with 3Q24 power generation yoy +38%, which is significantly faster than 2Q (+28%) /1Q (+29%); among them, wind power yoy +24%, onshore wind power yoy +35%, offshore wind power yoy +35%; photovoltaic power yoy +63%. Benefiting from the dilution of electricity volume growth on depreciation and operating costs, the company's 3Q24 gross margin yoy+1.9pp to 48.5%. The profit fluctuation of participating companies changed investment income from profit to loss, causing the company to deduct the non-net interest rate yoy-1.1pp to 15.7% in 3Q24.
Excluding the impact of investment income and impairment losses, we estimated the 3Q24 company's overall net electricity profit yoy +13% to 0.093 yuan, reversing the year-on-year downward trend in 1Q/2Q. Considering market-based transactions and changes in the share of wind and electricity, we expect the 4Q24 quantitative trend to continue.
National reimbursements increase operating cash flow, and the risk of impairment is expected to be mitigated
With the repayment of some green power subsidies, the company's accounts receivable at the end of September were basically the same as at the end of June, accounting for qoq-0.5pp to 42.0%, reversing the quarterly upward trend since the end of '22; 9M24's operating cash flow yoy +22% to 14.238 billion yuan, close to the full year level of 23, of which 3q24yoY +32% reached 6.121 billion yuan. The company adheres to prudent accounting policies. Since the absolute value of accounts receivable is still high, 3Q24 credit impairment losses still increased year-on-year. The company is expected to significantly benefit from the accelerated repayment of green power subsidies, improving the quality of cash flow and reducing the risk of impairment.
Increase profit forecasts and target prices
Taking into account national reimbursements and credit impairment losses, we predict that the company's net profit for 24-26 will be 7.336/9.021/10.483 billion yuan (previous value 7.215/8.877/10.314 billion yuan), with a year-on-year growth rate of 2.2%/23%/16%, EPS of 0.26/0.32/0.37 yuan, and 25-26 CAGR = 20%. Wind unanimously anticipated that the company's 25-year PEG average would be 1.0x, giving the company a 25-year average of 1.0xPEG/20xPE, with a target price of 6.4 yuan (previous value 6.2 yuan).
Risk warning: The risk of declining utilization hours, falling short of expectations on projects under construction, and lagging green power subsidies.
