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龙源电力(00916.HK):Q3业绩亮眼 资产注入助力装机增长

Longyuan Electric Power (00916.HK): Outstanding Q3 performance, asset injection boosts installed capacity growth

Incidents:

The company announced results for the third quarter of 2024. In the first three quarters, the company achieved revenue of 26.35 billion yuan, a year-on-year decrease of 6.37%; completed net profit to mother of 5.668 billion yuan, a year-on-year decrease of 11.38%.

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The transfer of Jiangyin Sulong's shares has been completed. The company completed the transfer of shares in Jiangyin Sulong Thermal Power Co., Ltd. with a year-on-year ratio of +2.4% of power generation in the first three quarters. The installed capacity of the holding was reduced by 1.24 GW, including 1.22 GW of thermal power and 0.03 GW of photovoltaics. Combined with the new units put into operation, as of the end of September, the company held a total of 37.01 GW of installed capacity, including 28.38 GW of wind power, 0.66 GW of thermal power, and 7.97 GW of other renewable energy sources such as photovoltaics. Judging from the operating situation, the number of hours used by the company's wind power fell 108 hours year on year to 1,707 hours in the first three quarters. The completed wind power generation capacity was 43.9 billion kilowatt-hours, a slight decrease of 1.82% year on year; it completed 5.8 billion kilowatt-hours of electricity generated by other renewable energy sources such as photovoltaics, which increased 82.76% year on year.

Under the influence of the commissioning of new units combined with the increase in equity disposal revenue, the net profit for single Q3 was +30% on the revenue side. The company achieved revenue of 26.35 billion yuan in the first three quarters, a decrease of 6.37% over the previous year. Among them, the wind power division was 19.116 billion yuan, a year-on-year decrease of 8.35%; the thermal power division was 5.439 billion yuan, a year-on-year decrease of 12.48%; the photovoltaic division was 1.568 billion yuan, up 65.51% year on year; and the other division was 0.227 billion yuan, up 83.84% year on year. In addition, the amount of proceeds from Jiangyin Sulong's equity disposal has been included in other net income and is expected to contribute 0.514 billion yuan of pre-tax revenue. On the cost side, the company's operating expenses fell 1.51% year-on-year to 17.605 billion yuan in the first three quarters. Taken together, in the first three quarters, the company achieved net profit of 5.668 billion yuan, a year-on-year decrease of 11.38%; in the third quarter, the company achieved net profit of 1.647 billion yuan, an increase of 29.89% over the previous year, or the combined effects of additional units and equity disposal revenue.

The Group plans to inject 4GW of new energy assets, the first batch of about 2GW

In order to implement the “Supplementary Letter of Commitment from China Energy Investment Group Co., Ltd. to avoid competition with Longyuan Electric Power Group Co., Ltd.”, the National Energy Group plans to start injecting shares of new energy companies that meet the injection conditions into the company in some of its provincial companies. The estimated installed capacity of new energy sources is about 4 million kilowatts, and the initial plan is to inject them in batches. Recently, the company announced that it plans to acquire shares in 8 new energy companies in Shandong, Jiangxi, Gansu, and Guangxi, which are wholly-owned subsidiaries of the National Energy Group, in cash. The total installed capacity of the target companies in operation and construction is 2.0329 million kilowatts, of which 1.4469 million kilowatts are in operation and 0.586 million kilowatts; wind power is 1.316 million kilowatts, and PV 0.7169 million kilowatts.

Profit forecasting and valuation

Net profit due to mother for 2024-2026 is estimated to be 6.6, 7.5, and 8.2 billion yuan, corresponding to PE of 9, 8, and 7 times, maintaining a “buy” rating.

Risk warning: risk of a sharp decline in macroeconomics; risk of electricity price reduction; risk of policy implementation falling short of expectations; risk of industry competition being too intense; risk of continuing delays in subsidies; risk of corporate development projects falling short of expectations; uncertainty about asset injection, etc.

The translation is provided by third-party software.


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