Core views
By 2023H, the company expects to achieve net profit of 788 million yuan, an increase of 835 million yuan over the previous year. This is mainly due to falling coal prices driving a recovery in domestic profitability, an increase in the company's installed scale of clean energy power generation, power generation capacity, and an increase in revenue from overseas projects. In 2023H, the unit price of standard coal entering the factory (tax included) was 1219.67 yuan/ton, down 12.08% from the previous year. The decline in fuel costs led to a recovery in domestic thermal power profitability. 23H wind power generation increased 9.97% year over year, and photovoltaic power generation increased 9.57% year over year. 23H Turkey's EMBA Power Generation Company achieved a net profit of 473 million yuan. In addition, 23H has obtained 900,000 kilowatts of competitive capacity for new energy power generation domestically, started construction of more than 300,000 kilowatts of green power abroad, and the new energy power generation business has maintained rapid development. We predict that the company's net profit attributable to common shareholders from 2023 to 2025 will be 2.16 billion yuan, 3.129 billion yuan, and 3.637 billion yuan respectively, maintaining the “buy” rating.
occurrences
The company released its 2023 semi-annual report
In the first half of 2023, the company achieved revenue of 20.046 billion yuan, an increase of 25.36% over the previous year; it achieved net profit of 788 million yuan, turning a loss into a profit over the previous year. EPS was 0.25 yuan/share, compared to -0.04 yuan/share for the same period last year; the weighted average ROE was 4.14%, up 4.87 percentage points from the same period last year.
Brief review
Net profit attributed to the mother turned a loss into a profit, mostly due to contributions to increased performance
In the first half of 2023, the company achieved net profit of 788 million yuan, an increase of 835 million yuan over the previous year. This was mainly due to falling coal prices driving a recovery in domestic profitability, an increase in the company's installed scale of clean energy power generation, power generation capacity, and an increase in revenue from overseas projects. In terms of domestic thermal power, benefiting from the continued decline in coal prices in the domestic and international markets, the unit price (including tax) of coal entering the factory in 2023H was 1219.67 yuan/ton, a year-on-year decrease of 12.08%. The company's thermal power fuel costs have declined, driving a recovery in domestic thermal power profitability. In terms of new energy, 23H wind power generated 5.014 billion kilowatt-hours, up 9.97% year on year; photovoltaic power generation completed 2,699 billion kilowatt-hours, up 9.57% year on year. In terms of foreign thermal power, the company's Turkey's Hunutlu coal-fired power project was put into operation at full capacity in October 2022, contributing to increased profits.
Electricity prices in Turkey declined somewhat in 23H. In 23Q2, the average price of electricity in the Turkish market was 1,767 liras per kilowatt-hour, down 36.6% from the previous month. Affected by the fall in electricity prices, Turkey's EMBA power generation company achieved net profit of 473 million yuan in the first half of the year, and electricity profit was about 9.4 percent.
Continuously expand the installed scale of new energy, and the operating efficiency is stable and excellent
By the end of June 2023, the company's holding installed capacity was 21,1456 million kilowatts, of which the installed capacity of coal power, gas power, wind power and photovoltaics was 984.8, 287.5, 392.4 and 4.498 million kilowatts, respectively, accounting for 46.57%, 13.60%, 18.56% and 21.27% of the total installed capacity, with clean energy accounting for 53.43% of the installed capacity. In the first half of 2023, the company added 233,300 kilowatts of installed capacity, mainly distributed photovoltaic and wind power installations.
In 2023H, the company's domestic new energy project competition results are impressive. It has obtained 900,000 kilowatts of competitive capacity, including 450,000 kilowatts of offshore wind power in Shanghai, 200,000 kilowatts of wind power in Dangchang, Gansu, and 250,000 kilowatts of wind power and photovoltaics from Guangxi Autonomous Region. Overseas development is efficient and steady. Japan's Yamaguchi Iwakuni 75,000 photovoltaic project and Turkey's Hunutlu Hybrid Power Station Phase I 21,000 kilowatt photovoltaic project have been put into operation with high quality. Hungary's Tokaj 200,000 kilowatt photovoltaic project, Hungary's Victor 132,000 kilowatt photovoltaic project, and Turkey's Hunutlu Hybrid Power Station Phase II 27,000 kilowatt photovoltaic project have started.
In terms of power generation, 2023H completed consolidated caliber power generation of 35.041 billion kilowatt-hours, up 27.64% year on year, of which coal power completed 24.461 billion kilowatt-hours, up 37.67% year on year; gas power completed 2,873 billion kilowatt-hours, up 7.66% year on year; wind power completed 5.014 billion kilowatt-hours, up 9.97% year on year; photovoltaic power generation completed 2,699 billion kilowatt-hours, up 9.57% year on year.
In terms of feed-in tariffs, in the first half of 2023, the company's average Internet price was 0.62 yuan/kilowatt-hour, an increase of 4.60% over the previous year. In terms of electricity volume traded in the market, in January-June 2023, the company's market transaction volume was 23.912 billion kilowatt-hours, up 33.30% year on year. Among them, direct power supply transactions amounted to 160.40 kilowatt-hours, an increase of 59.59% over the previous year, power grid purchases of 7.52 billion kilowatt-hours, an increase of 30.35% over the previous year, and spot traded electricity volume was 64 million kilowatt-hours.
It developed the first public REITs for energy central enterprises and maintained the “buy” rating of the company's financing work in the first half of the year. The subsidiary China Power Investment Jiangsu Company successfully issued the first public REITs order for energy central enterprises, making it the first public REITs project in China to subscribe for more than 100 billion yuan offline. The balance ratio fell 5.66 percentage points to 70.55% over the same period last year. There are many high-quality new energy assets within the company, and it is expected that in the future, it will continue to revitalize the volume of assets in the form of REITs to improve capital utilization efficiency. We predict that the company's net profit from 2023 to 2025 will be 2.29 billion yuan, 3,259 billion yuan, and 3,768 billion yuan respectively; net profit attributable to common shareholders will be 2.16 billion yuan, 3.129 billion yuan, and 3.637 billion yuan respectively; EPS will be 0.77 yuan/share, 1.11 yuan/share, and 1.29 yuan/share, respectively, maintaining the “buy” rating.