Changjiang Power (600900): Both the volume and price of hydropower business increase to promote the company's performance growth
Event: Recently, the company disclosed the 2023 annual report and 2024 quarterly report. In 2023, the company will achieve a revenue of 78.112 billion yuan, with a year-on-year growth of 13.43%; The net profit attributable to the parent company was 27.239 billion yuan, up 14.81% year on year. In 2024Q1, the company achieved revenue of 15.641 billion yuan, up 1.58% year on year; The net profit attributable to the parent company was 3.967 billion yuan, up 9.80% year on year.
Comments:
Baihetan Hydropower Station was fully put into operation to help the company's power generation growth. In 2023, the total power generation of the six cascade power stations within the company's territory will be about 276.263 billion kWh, with a year-on-year increase of 5.34%. Among them, the power generation of Wudongde/Baihetan/Xiluodu/Xiangjiaba/Three Gorges/Gezhouba Power Station will be 349.14/57324/549.34/311.32/802.71/17.688 billion kWh, with a year-on-year change of - 4.64%/+43.11%/- 4.97%/- 1.33%/+1.88%/+1.46%. Baihetan Hydropower Station will be fully put into operation in 2023, helping the company's power generation growth.
Both the volume and price of hydropower business increased, promoting the company's performance growth. In 2023, the on grid power of hydropower in the company will be 274.78 billion kWh, with a year-on-year growth of 5.37%; The on grid electricity price was 281.28 yuan/MWh, up 4.29% year on year. Both the volume and price of hydropower business increased, promoting the company's performance growth.
The company's net interest rate was mainly dragged down by the sharp increase in financial expenses. In terms of profitability, the gross profit margin of the company will be 57.83% in 2023, up 0.53 percentage points year on year; The net interest rate was 35.79%, down 5.79 percentage points year on year. The company's net interest rate was mainly affected by the sharp increase in financial expenses.
In 2023, the company's financial expenses will reach 12.556 billion yuan, a year-on-year increase, mainly because (1) the scale of interest bearing liabilities of the merger and acquisition of Yunchuan Company will increase, and the interest expenses will increase accordingly; (2) 2023 will be the first full year after Baihetan Hydropower Station is fully put into operation, and the amount of interest expense will increase year on year.
The comprehensive utilization rate of water resources has reached a record high. As the company completed the acquisition of Wudongde and Baihetan power stations, the "regulation integration" management of cascade power stations in the lower reaches of Jinsha River was fully implemented. In 2023, zero waste water and power loss will be achieved, and the comprehensive utilization rate of water resources will hit a record high. In 2023, the target water level of the Three Gorges Reservoir before flood season will rise to 150 meters for the first time, and the cascade hydropower stations will save water and generate 12.13 billion kilowatt hours of electricity in the whole year; For the first time, Wudongde Reservoir has reached the normal pool level of 975 meters, and the cascade reservoirs have been full on schedule for the first time.
Investment suggestion: It is estimated that the company's EPS from 2024 to 2026 will be 1.30 yuan, 1.38 yuan and 1.47 yuan respectively, and the corresponding PE will be 20 times, 19 times and 18 times respectively, maintaining the "buy" rating of the company.
Risk warning: policy promotion is not as expected; The economic development is not as expected; On grid price fluctuation risk; Price fluctuation risk of raw materials, etc.
