Core ideas:
Q3's net profit increased 51% month-on-month, while the gross profit margin of the main business decreased slightly. The company released its three-quarter report in 2023, with revenue of 31.4 billion yuan (+ 12.9% compared with the same period last year) in the first three quarters, of which Q3 was 11.2 billion yuan (- 4.3% compared with the same period last year), and its net profit was 1.47 billion yuan (+ 524% compared with the same period last year). Of which Q1, Q2 and Q3 were 3.4,4.5 and 680 million yuan respectively (Q3 chain ratio + 50.5%). The decline in revenue in the third quarter is mainly due to the impact of the decline in electricity prices in Turkey (Q3 electricity consumption is + 10.8% year-on-year and electricity price is-7.1% compared with the same period last year). The continuous improvement in performance compared with the previous year is expected to be mainly due to the good impact of cost control (the gross profit margin of the main business decreased by 2.35% and the investment income decreased by 35 million yuan). The rates of management and financial expenses decreased by 1.15% and 1.37% respectively.
It is expected that the profits of Turkish power plants will gradually return to a reasonable level, and there is much room for upward revision of domestic thermal power profits.
The power generation in the first three quarters was 56.1 billion kilowatt hours (+ 20.6% compared with the same period last year), of which coal power, gas power, wind power and photovoltaic were 395,54,68 and 4.4 billion kilowatt hours respectively. When Q3 makes a profit of 6 cents in Turkish power plant, domestic thermal power achieves a break-even; looking forward to the follow-up, it is expected that Turkish power plant profit will gradually return to a reasonable level (2023H1 electricity profit 9% 4). With the improvement of long Association coal performance rate and coal cost improvement, domestic thermal power performance will be more flexible.
Green 0.4GW was added in the first three quarters, and the speed of green power is expected to increase. By the end of September, the company controlled the installed 22.1GW, and the wind and light were 3.9GW and 4.7GW respectively. The new energy target in 2023: to ensure approval, construction, production of 7.9,4.6, 6.8GW, the first three quarters have been put into production of 0.4GW. One of the conditions for the exercise of equity incentive in the company is that the installed proportion of clean energy is not less than 54%, 56% and 58% (2023Q3 is 55.36%). We look forward to the acceleration of green power construction in the follow-up.
Profit forecast and investment advice. It is estimated that the return net profit of the company in 2023 to 2025 is 20.45,28.09,3.624 billion yuan respectively, and the PE corresponding to the latest closing price is 12.10,8.80,6.82 times respectively. The company promotes clean energy transformation, new energy planning is strong, thermal power performance is expected to hit bottom and pick up. With reference to the inter-industry valuation, the company is given a 15-fold PE valuation in 2023, corresponding to a reasonable value of 10.89 yuan per share, maintaining a "buy" rating.
Risk hint. Coal prices continue to rise, project construction schedule, electricity demand and other risks are lower than expected.