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Guiguan Electric Releases Earnings Report for the First Three Quarters of 2022
Guiguan Electric Power released a performance report for the first three quarters of 2022. The company achieved revenue of 8.618 billion yuan in the first three quarters of 2022, an increase of 34.78% over the previous year; achieved net profit of 3,217 billion yuan, an increase of 105.86% over the previous year; realized net profit of 3,227 billion yuan after deducting non-return parents, an increase of 106.33% over the previous year; and the weighted average ROE was 19.76%, an increase of 10.76 percentage points over the previous year. In the third quarter alone, the company achieved operating income of 3 billion yuan, an increase of 45% over the previous year; net profit of the mother was 1,313 billion yuan, an increase of 300.3% over the previous year.
Brief review
The double increase in the volume and price of hydropower contributed to high performance growth. The electricity structure was continuously optimized. By the end of the third quarter of 2022, the company had an installed capacity of 124.8836 million kilowatts in service. The company's power supply structure is reasonable. Clean energy such as hydropower and wind power account for a relatively high share of the company's installed capacity. The installed capacity of hydropower, thermal power, wind power, and photovoltaics is 10.227,600 kilowatts, 1.33 million kilowatts, 766,000 kilowatts, and 217,500 kilowatts respectively. In the first three quarters of 2022, the hydropower business achieved power generation capacity of 30.797 billion kilowatt-hours, an increase of 28.25% over the previous year. Among them, the power generation capacity in the third quarter was 9.908 billion kilowatt-hours, an increase of 25.39% over the previous year. The reason was a sharp increase in incoming water from the Hongshui River Basin where the main hydropower is located. The power generation capacity of the Longtan Hydropower Station in a single quarter was 3,856 million kilowatt-hours, an increase of 58.5% over the previous year. The high-frequency hydrological data we tracked showed that the average outbound flow in Longtan in the third quarter was 734 m3/sec, an increase of 50% over the previous year, which is more in line with the power generation data. Furthermore, we estimate that the company's hydropower prices increased significantly year-on-year in the third quarter, and that the volume and price of hydropower increased sharply, which became the core driving force for the company's performance to improve dramatically. In terms of other power sources, wind power generated 303 million kilowatt-hours in the third quarter alone, an increase of 22.2% over the previous year; thermal power generated 874 million kilowatt-hours, a reduction of 155 million kilowatt-hours, due to the company's continuous optimization of the power generation structure. The amount of wind power with higher marginal profit increased year-on-year, and the amount of thermal power with lower marginal profit decreased year-on-year, which also contributed to the company's profit growth. Furthermore, the company made every effort to reduce financing costs, seek preferential loans, save financial expenses, and contribute to profit growth.
The water level in Longtan is in a good position, and is expected to stabilize, moderate and improve in the fourth quarter
As of September 30, 2022, the water level in Longtan Reservoir was 364.3 meters, an increase of 6.2 meters over the same period last year. The water storage situation at the company's hydropower plant was relatively good, laying a good foundation for growth in the fourth quarter. We believe that the company's hydropower assets are of high quality, and wind and photovoltaic power generation are expected to develop steadily. It is estimated that the net profit returned to the mother from 2022 to 2024 will be 3.621 billion yuan, 3.197 billion yuan, and 3.374 billion yuan respectively. The corresponding EPS will be 0.46, 0.41, and 0.43 respectively, maintaining the “buy” rating
Risk warning: risk of falling water; risk of falling utility prices; risk of new energy installed growth falling short of expectations; risk of fluctuations in fair value