Event description
The company released the third quarter of 2023 report: in the third quarter of 2023, the company achieved operating income of 65.289 billion yuan, a decrease of 2.67% over the same period last year, and a net profit of 6.255 billion yuan, an increase of 770.02% over the same period last year.
Event comment
Thermal power remains stable, and cost optimization leads the performance. In the third quarter, the power consumption of coal power in the company completed 108.014 billion kilowatt-hours, a decrease of 0.12% compared with the same period last year, which was mainly due to the high base in the same period last year and the large hydropower generation squeezing thermal power output since the third quarter. In fact, from a month-on-month point of view, the power supply of coal power increased by 24.90% month-on-month in the third quarter, and the month-on-month growth of electricity will dilute the fixed cost of electricity, which is good for the performance repair of thermal power. In addition, the company completed 8.099 billion kilowatt-hours of electricity, an increase of 8.92% over the same period last year, and a month-on-month increase of 44.96%. In terms of electricity price, the average grid price of the company's power plants in the first three quarters was 509.66 yuan / MW hour, up 0.52% from the same period last year, but the average grid price in the third quarter was 500.34 yuan / MW hour, a month-on-month decrease of 11.34 yuan / MW hour. the high probability of electricity price reduction is affected by the decline in monthly or spot transaction prices.
But overall, driven by month-on-month growth in electricity, the company's revenue in the third quarter continued to be strong compared with the previous quarter. In terms of cost, coal prices have fallen rapidly since the third quarter. The average closing price of Q5500 power end coal in Qinhuangdao Port was 866.19 yuan / ton, down 31.51% from the same period last year, and 5.27% from the previous month. The fall in coal prices helped the company improve its cost side, while the strong performance of electricity further boosted the company's thermal power business. The company's thermal power business made a total profit of 3.194 billion yuan in the third quarter, an increase of 2.506 billion yuan over the same period last year, and an increase of 6.016 billion yuan over the same period last year. Among them, the total profit of coal machinery in the third quarter returned to 0.0263 yuan / kWh, an increase of 0.019 yuan / kWh.
New energy and overseas business are under pressure on a month-on-month basis, while thermal power and investment income lead performance repair. In the third quarter, the company's wind power completed 6.328 billion kilowatt-hours, an increase of 8.09 percent over the same period last year, a decrease of 27.22 percent from a month earlier, and photovoltaic power consumption of 3.324 billion kilowatt hours, an increase of 83.74 percent over the same period last year and 16.59 percent month-on-month growth. The year-on-year growth of the company's new energy electricity is mainly due to the expansion of installed capacity, and the decline of wind power compared with the previous year is mainly affected by seasonal factors. On the whole, as wind power is the main power source of new energy, and its electricity has declined from the previous quarter, the total profit contributed by the company's new energy business in the third quarter was 1.488 billion yuan, a decrease of 1.268 billion yuan compared with the previous quarter. In addition, due to the rapid rise in electricity prices driven by tight supply and demand in Singapore in the first half of the year, the company's overseas Singapore business contributed 2.39 billion yuan, a year-on-year growth rate of 287.82%, making it an important source of performance.
In the third quarter, the quarterly and monthly basic load average electricity price of Singapore USEP decreased by 36.71% and 34.69% respectively compared with the second quarter, so with the gradual decline of Singapore electricity price, the company's Singapore asset profit contribution will return to the reasonable income level, but in terms of performance contribution, it will be lower than the previous quarter. In addition, the company completed the transfer of 49% stake in Huaneng Sichuan Hydropower in the third quarter, contributing a total pre-tax profit of 2.1 billion yuan, making the company's investment income reach 2.796 billion yuan in the third quarter, an increase of 665.73% over the same period last year and 462.53% month-on-month growth. On the whole, although there is pressure on the company's new energy and overseas business to contribute profits from the previous month, due to the more significant performance increment brought by the sale of shares in thermal power and Sichuan companies, the company achieved a net profit of 6.255 billion yuan in the third quarter, an increase of 770.02% over the same period last year. The net profit of 3.824 billion yuan was deducted, an increase of 410.89% over the same period last year.
Investment suggestion: according to the latest financial data of the company, it is estimated that the EPS of the company from 2023 to 2025 is 0.90,1.02 and 1.02 yuan respectively, and the corresponding PE is 7.93,6.98 and 6.93 times respectively. Maintain the company's "buy" rating.
Risk hint
1. there is a risk of deterioration in power supply and demand.
2. Non-seasonal risk appears in coal price.