Event: The company released its 2022 report and its 2023 quarterly report on April 27, 2023. In 2022/23Q1, the company achieved operating income of 304.85/8.5577 billion yuan, an increase of 37.07%/9.49% over the previous year; net profit of Guimo was 803/408 million yuan, an increase of 125.77%/39.02% over the previous year; net profit of 8.21/395 million yuan after deducting non-Gummo, an increase of 123.00%/38.13%; EPS 0.12/0.06 yuan/share; plans to distribute discovery dividends for every 10 shares 1.2 yuan (tax included).
Comment: The installed capacity of coal power continues to grow, and new energy is developing rapidly. In December of last year and April of this year, the company put into operation a total of 1.32 million kilowatts of new units 3 and 4 of the Jingning Phase II, respectively. Currently, it holds 18.46 million kilowatts of coal power installations (equity accounts for 76.49%), and 4 coal power projects under construction totaling 4.99 million kilowatts.
The new energy sector achieved a historic breakthrough. Within the year, the target was 2.4 million kilowatts, the reserve project was 3.85 million kilowatts, and 25/200,000 kilowatts were put into operation at the end of last year/beginning of this year. Currently, the main projects under construction are 1.5 million kilowatts in Ulanqab (51% of equity) and 2 million kilowatts of Toketor (25% of equity). The installed capacity of new energy in operation/construction exceeded 40.1/1486,000 kilowatts.
The performance of coal power has clearly recovered, and investment returns have increased dramatically. In 2022, the company's average tax-inclusive unit price of coal power increased 85 yuan/MWh (+25.5%) year-on-year to 382.68 yuan/MWh. Among them, spot/emergency support electricity prices increased the average traded electricity price of 56 yuan/MWh during the heavy summer load period. 40 units participated in peak adjustment, and ancillary service revenue increased 26% year-on-year. Mainly benefiting from the sharp increase in electricity prices and the narrowing increase in unit fuel prices, the gross margin of the company's power business increased 18.83 pcts to 13.82% year on year, driving the company's comprehensive gross margin to increase 17.47 pcts to 9.50% year on year. In addition, the company's participation in the Shanzigou coal mine contributed 750 million yuan (-0.30%) in investment income. The profits of most of the participating thermal power plants improved, and the company's net investment income increased 1,112 billion yuan to 1,161 million yuan over the same period last year. As electricity prices remain high and coal prices gradually fall, the profitability of the company's participation in holding coal power units is expected to continue to increase.
The first quarter started well, and full-year results can be expected. The company's thermal power generation capacity in the first quarter of this year was 21,315 million kilowatts, up 10.30% year on year, new energy generation capacity was 65 million kilowatts, the consolidated average electricity price was 416.81 yuan/MWh, an increase of 0.83% over the previous year. It is estimated that electricity gross margins increased 1.29/0.66pct year-on-year to 9.39%, net profit increased 1.53/6.14pcts year-on-year to 5.69%, net profit increased by 0.5/1.27pcts to 1.60% year-on-year/month-on-month. It reached a new high in nearly 10 quarters, exceeding the average for the first quarter of the 13th Five-Year Plan. In a context where the coal price center is expected to decline this year, when combined with the company's coal power installation or production of 365 million kilowatts and the green power unit's profit contribution, the company's annual profitability is expected to approach or exceed 2020 levels.
Profit forecast: The company's revenue is estimated to be 323.00/394.70/407.85 billion yuan in 2023-2025, net profit of 1,245/21.28/2,459 billion yuan, EPS 0.19/0.32/0.37 yuan/share, corresponding to PE17.69/10.35/ 8.96 times, maintaining the “buy” rating.
Risk warning: The fall in fuel costs fell short of expectations, and the progress of new construction projects fell short of expectations.