Investment Rating - The report initiates coverage with an "OUTPERFORM" rating for China General Nuclear Power (1816 HK) [2][36]. Core Views - The core business of China General Nuclear Power demonstrates stable profitability, with nuclear power accounting for a significant portion of the country's energy supply [5][8]. - The company is positioned as a leader in the nuclear power sector, with a strong operational capacity and ongoing projects that support future growth [5][24]. Summary by Sections 1. Clear Outlook for Nuclear Power Leader - China General Nuclear Power is the sole platform for nuclear energy generation under China General Nuclear Group, a state-owned enterprise regulated by the State-owned Assets Supervision and Administration Commission [8]. - The company focuses on safe, efficient, and low-carbon energy supply through the construction, operation, and management of nuclear power plants [8]. 2. Stable Financials and Growing Cash Dividends - In 2023, the company achieved operating revenue of RMB 82.56 billion, with a slight decrease of 0.35% year-on-year, while net profit rose by 9.99% to RMB 9.49 billion [13]. - Power sales contributed RMB 62.52 billion, accounting for 75.7% of total revenue, with a gross profit of RMB 28.67 billion and a gross margin of 45.85% [13][5]. - The company has maintained a stable dividend growth, with a payout ratio of 44.3% based on net profit [19]. 3. Nuclear Power "Duopoly" Dominating the Market - As of the end of 2023, China General Nuclear Power operated 27 nuclear units with a total installed capacity of 30,568 MW, representing 53.6% of the national operational nuclear capacity [27][24]. - The company is expected to see steady growth in installed capacity, with an average of 1-2 units expected to be commissioned annually from 2024 to 2028 [31]. 4. Extending Nuclear Plant Lifespan as a Path to Net Zero by 2050 - The company has significantly reduced coal consumption and CO2 emissions through its operations, contributing to environmental sustainability [33]. - Extending the operational lifespan of nuclear plants is crucial for achieving net-zero emissions by 2050, with the potential to add substantial low-carbon electricity to the grid [33]. 5. Profit Forecast and Valuation - The report forecasts operating revenues for FY24-26 at RMB 87.12 billion, RMB 91.95 billion, and RMB 97.05 billion, respectively, with corresponding net profits of RMB 16.23 billion, RMB 17.78 billion, and RMB 19.34 billion [34]. - A target price of HK$3.27 per share is set based on DCF valuation, reflecting the company's stable dividend growth and decreasing debt ratio [34].
首次覆盖：核心业务盈利稳定，核电“双雄”稳占半壁江山