【行业研究报告】中国电力-Strong FY24 Earnings Outlook, “Buy”

2023earningsmissed.CPID(the"Company")reported2023earningsof
RMB2,660mn,missingourexpectation,primarilyduetoassetamortisationof
RMB650mnandlossofRMB826mnbookedbythehydrosegment,both
higherthanourestimates.TheCompanyannounced2023DPSofRMB0.13
(vs.RMB0.11in2022).CPIDraised2023payoutratioto61%(upfrom55%in
2022)withaDPSofRMB0.13(upfromRMB0.11in2022).This,inourview,
2022)withaDPSofRMB0.13(upfromRMB0.11in2022).This,inourview,
reflectsmanagement'sconfidenceover2024earningsgrowthanditsintention
tosmoothoutdividendpayments.
Thermalpowersegmentasthecashcow:In2023,CPID'sthermalpower
segmentwasturnedaroundwithstrongearningsofRMB1,315mn(vs.lossof
RMB1,391mnin2022).In2023,theaveragedarkspreadimprovedfrom
RMB82/MWhin2022toRMB111/MWh,drivenbymorerapiddeclineinunit
fuelcosts.For2024,CPID'smanagementbelievesdarkspreadscouldimprove
further,primarilydrivenby3-5%furtherdeclineinunitfuelcosts.Followingthe
turnaround,CPID'sthermalsegmentshouldbeabletoactasacashcowfor
bothnewenergyexpansionanddividendpayout.
Prudentyetsolidexpansioninrenewables:In2023,CPIDaddedatotalof
13.4GWofrenewablecapacities(including7.5GWfromassetinjection).The
Companytargets7GWoforganicnewenergycapacitygrowthin2024,
implyingthat78.7%ofitstotalgenerationcapacitybytheyearendwillbeclean
energy.2024capexbudgetissetwithinRMB30bn,flatyoy,benefitingfrom
decliningnewenergyequipmentcosts.CPID'smanagementremains
committedtothegreentransformationplan,whichaimstohaveover90%of
theCompany'stotalconsolidatedcapacityincleanenergyby2025.
Hydropowershowedsignsofimprovementin1Q24.Duetoconsistently
lowlevelofrainfallintheriverbasinswheretheCompany'shydropowerplants
arelocated,theCompany'shydrosegmentrecordedlossofRMB826mnin
2023.WecurrentlyseechancesofnormalisationfortheCompany'shydro
businessin2024.In1-2M24,theCompany'shydropowersoldrebounded
stronglyby83%yoy,thankstoconsiderableimprovementinwaterflows.
Maintain"Buy":Wecutour2024-2025earningsestimatesby9%and14%to
RMB5,518mnandRMB7,078mn,respectively,onmoreprudentexpansionof
newenergybusinessanddownwardpressureforrenewabletariffs.We
introduceour2026earningsestimateofRMB8,844mn.Wereduceour
SOTP-derivedTPfromHK$4.10toHK$3.70(thermal:1.2x2024FPB;new
energy:8.5x2024FPE;hydro:12.0x2024FPE).Downsiderisks:Extreme
weatherconditions;lower-than-expectedtariffs;delayinprojectroll-out.
Rating:Buy
Maintained
6-18mTP目标价:HK$3.70
Revisedfrom原目标价:HK$4.10