Guodian Electric Power released its 2024 quarterly report, achieving operating income of 45.555 billion yuan, -0.13% year on year; net profit to mother of 1,785 billion yuan, +88.62% year over year.
Investment returns increased, and the company's performance continued to recover. Guodian Electric Power released its 2024 quarterly report. 1Q24 achieved operating income of 45.555 billion yuan, -0.13% year on year; net profit to mother of 1,785 billion yuan, +88.62% year on year. The sharp increase in performance was mainly due to the increase in investment income from joint ventures and Prudential Shendong, which increased net profit of 199 million yuan; the weighted average return on net assets was 3.59%, +1.52 pct year on year.
The amount of thermal power has been growing steadily, and feed-in tariffs have declined slightly. The electricity consumption of the entire society in 1Q24 was 2.34 trillion kilowatt-hours, an increase of 9.8% over the previous year. Benefiting from increased demand, the company achieved feed-in power of 10.690 billion kilowatt-hours, +5.02% year over year. Among them, thermal power feed-in capacity was 86.023 billion kilowatt-hours, +4.24% year over year, highlighting the insured status; hydropower feed-in electricity was 7.728 billion kilowatt-hours, -3.22% year over year. The company's market-based electricity transactions accounted for 92.85%, -0.35pct year on year; the average feed-in electricity price was 455.58 yuan/megawatt-hour, -1.62% year-on-year.
The amount of photovoltaic power increased over the same period last year, and the installation of new energy sources accelerated. The company's wind power/photovoltaic feed-in electricity capacity was 5138/1,801 billion kilowatt-hours respectively, +11.66%/136.26% year-on-year, and photovoltaic power generation increased significantly. The company added 635,500 kilowatts of installed capacity of New Energy Holdings, a significant increase of +31.55% over the same period last year, and the installed capacity is expected to achieve high growth throughout the year.
Profits continued to recover, and investment returns increased dramatically. 1Q24's gross margin was 13.34%, -0.003pct year on year; net margin was 7.59%, +2.39pct year on year. The sales/management/R&D/finance rates were 0.01%/1.17%/0.19%/3.61%, respectively, -0.01pct/-0.04pct/+0.07pct/-0.22pct.
The company achieved net investment income of 775 million yuan, +744.27% year over year, of which investment income in joint ventures was 453 million yuan, +568.05% year over year. Improved investment income contributed to performance growth.
Profit forecasting and valuation. The company has a coal guarantee from Shenhua Group, with significant cost advantages; the two electricity systems are expected to be put into operation in 2025, which is expected to mitigate hydropower consumption problems. The commissioning of the Shuangjiangkou Hydropower Station in 25-26 will greatly increase the company's hydropower installation, and the additional generation effect is also expected to increase hydropower profits; the rapid growth of new energy installations, and the transfer of China Power Construction Investment to eliminate uncertainty in the Hasu Coal Mine. It will also bring additional benefits, and further growth in performance can be expected. Maintain the company's 2024-2026 net profit forecast of 76.01, 82.69, and 8.987 billion yuan, with year-on-year increases of 35.5%, 8.8%, and 8.7%, respectively; the PE corresponding to the current stock price is 11.7x, 10.7x, and 9.9x, respectively, maintaining the “Highly Recommended” rating.
Risk warning: risk of fuel cost fluctuations, feed-in electricity price fluctuations, new energy capacity expansion progress falling short of expectations, etc.