Guoyuan Securities·2024-04-30 07:00Investment Rating - The report assigns a "Buy" rating to China General Nuclear Power Corporation (CGN) with a target price of 4.04 CNY, indicating a potential upside of 21% from the current price [7]. Core Views - The report highlights steady growth in revenue and net profit, driven by ongoing construction of nuclear power projects and increased operational efficiency [2][4]. - The company is positioned to benefit from the growing demand for nuclear energy as part of China's transition to a greener energy structure, aligning with national carbon reduction goals [5][6]. Summary by Sections Financial Performance - In Q1 2024, CGN achieved revenue of 19.182 billion CNY, a year-on-year increase of 4.88%, and a net profit of 3.604 billion CNY, up 3.38% from the previous year [2]. - The total electricity generated by the company's nuclear units was approximately 51.814 billion kWh, reflecting a 1.83% increase year-on-year [2]. Cost and Profitability - The gross margin for Q1 2024 was 39.28%, a decrease of 1.95 percentage points year-on-year, while the net margin improved to 27.94%, an increase of 0.63 percentage points [3]. - The report notes a decline in R&D expenses by 46.13% year-on-year, indicating a focus on cost management [3]. Project Development - As of the end of 2023, CGN managed 11 nuclear units under construction, with several at various stages of development, including two in commissioning and four in preparation for construction [4]. - The company is also exploring comprehensive utilization of nuclear energy, including heating projects and energy storage solutions [4]. Market Outlook - CGN's operations contributed to significant reductions in coal consumption and emissions, with an estimated reduction of 64.672 million tons of coal and 17.645 million tons of CO2 in 2023 [5]. - The report anticipates robust demand for nuclear power in China, given the current low share of nuclear energy in the national energy mix [5]. Profit Forecast - The projected net profits for CGN from 2024 to 2026 are 11.602 billion CNY, 12.416 billion CNY, and 13.042 billion CNY, respectively, with corresponding P/E ratios of 17.58, 16.43, and 15.64 [6][10].