Guoxin Securities·2025-11-04 11:31Investment Rating - The investment rating for China General Nuclear Power Corporation (003816.SZ) is "Outperform the Market" [6][20]. Core Views - The company's revenue for the first three quarters of 2025 was CNY 59.723 billion, a decrease of 4.09% year-on-year, while the net profit attributable to shareholders was CNY 8.576 billion, down 14.14% year-on-year, primarily due to increased market-based electricity sales and declining electricity prices [9][11]. - The total electricity generation from the company's operational nuclear units reached 182.822 billion kWh, an increase of 2.67% year-on-year, with grid electricity sales at 172.179 billion kWh, up 3.17% year-on-year [9][11]. - The cancellation of the variable cost compensation for nuclear power in Guangdong is expected to lead to a rebound in electricity prices, with an estimated increase of approximately CNY 0.04/kWh in market-based prices starting in 2026 [2][17]. - The adjustment of the value-added tax policy for nuclear power is not expected to have a significant impact on profitability in the short term [3][19]. - The completion of the asset injection of Huizhou Nuclear Power is a significant development, with the company acquiring 82% of Huizhou Nuclear Power and 100% of its subsidiaries [3][19]. Summary by Sections Financial Performance - In Q3 2025, the company reported revenue of CNY 20.556 billion, a decrease of 10.21% year-on-year but an increase of 7.40% quarter-on-quarter. The net profit for the same period was CNY 2.624 billion, down 8.81% year-on-year and down 10.32% quarter-on-quarter [9][11]. - The gross margin for the first three quarters of 2025 was 33.5%, a decrease of 3.17 percentage points year-on-year, while the net margin was 21.58%, down 3.31 percentage points year-on-year [11][18]. Future Outlook - The company expects net profits for 2025, 2026, and 2027 to be CNY 9.41 billion, CNY 10.75 billion, and CNY 11.73 billion, respectively, with year-on-year growth rates of -13%, 14%, and 9% [20][22]. - The company is managing 28 operational units with a total installed capacity of 31.796 million kW and has 20 units under construction, representing 44.46% of the national total capacity [16][22]. Market Conditions - The market-based electricity price in Guangdong is expected to rebound due to the cancellation of the variable cost compensation mechanism, which is anticipated to positively impact the company's performance in 2026 [2][17]. - The company’s stock is currently priced at CNY 4.01, with a market capitalization of CNY 202.499 billion [6][21].