Huaneng Power International Inc
SSE:600011
Earnings Call Analysis
Q3-2023 Analysis
Huaneng Power International Inc
The company is proactively engaging in contract signing for 2024, starting the preparation phase a month or two earlier than usual, with an aim for better-quality contracts that align with its long-term goals. This preparation began in September, and the actual signing is scheduled from November to January next year. Although specifics will adhere to government-released documents yet to be issued, the company is committed to government-supported contracts to fulfill these objectives. Moreover, the company's projects demonstrate solid performance with most achieving a return rate higher than the investment hurdle rate of 6%, although returns do vary by project and province, ranging from approximately 5.2% to 13%.
The sale of Sichuan Hydropower significantly boosted pre-tax profits by CNY 2.1 billion, which also positively impacted profit attributable to shareholders due to combined losses allowing tax avoidance. Additionally, the company recognized an investment gain of CNY 100 million in the third quarter from this transaction. Despite such gains, there's been a decline in the utilization hours for wind and solar resources, with a drop of 21 and 30 hours, respectively. Compounded by the rise in the number of projects without feed-in tariffs and a consequent average tariff reduction of 8.3%, the company is experiencing changes in its renewable energy landscape and profitability from various energy sectors.
Operating cash flow saw a significant increase of CNY 7.6 billion in the third quarter, reaching CNY 19.9 billion, primarily due to a CNY 1.2 billion collection in renewable subsidies. The company also benefited from a decrease in fuel procurement costs thanks to a reduced coal inventory, further boosting the operating cash flow and contributing to ancillary service revenues of CNY 1.892 billion. Reflecting on this, along with the downward trend of the standard coal price, which saw a drop of CNY 161 per ton year-on-year, the company navigated the changes in coal and energy prices to maintain operational profitability.
Loss situations within the company have shown improvement, with only 27% of power plants incurring losses in the third quarter compared to 76% in the previous year, attributable to reduced coal prices and supportive government policies. The company adheres to strict accounting standards when evaluating asset impairments each quarter, ensuring fair and accurate valuations. While the third-quarter compound standard coal price stood at CNY 1,033 per ton, the company is committed to applying government policies on coal purchases to stabilize future costs and performance.
The third quarter showed strong growth in renewable energy, with wind and solar power generation expanding by 7.1% and 86.3%, respectively. Such increase is attributed to new projects that operate without feed-in tariffs. Despite the fluctuations in tariffs for market-based sales, the company has maintained a robust dividend payout policy, with more than CNY 62.7 billion distributed since 1998 and a commitment to a payout ratio of not less than 50%. The coal consumption rate stood steady at 294 gram per kilowatt hour, underscoring operational efficiency.
By the end of September, the company reported CNY 16 billion in outstanding renewable subsidies, mainly accumulated from 2021 to 2023. Focusing on growth, the company has significantly exceeded its construction targets, achieving 107% of its goal by putting 8,995 megawatts into construction and 73% of its annual goal by operationalizing 4,424 megawatts. With a construction cost ranging from CNY 3,800 to CNY 4,100 per kilowatt for solar projects, the company is on track to meet its capacity goals for the year.
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[Foreign Language] Good afternoon, ladies and gentlemen. On behalf of Huaneng Power International, Incorporated, I would like to welcome you all to the Conference Call regarding Third Quarter Results Announcement of 2023.[Foreign Language] Now may I introduce the management of the company today.[Foreign Language] The General Manager and Chief Accountant of the company, Mr. Huang Lixin. [Foreign Language]
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[Foreign Language] The Vice President and Board Secretary to the company, Mr. Huang Chaoquan. [Foreign Language]
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[Foreign Language] Independent Director of the company, Mr. Xu Meng Zhou. [Foreign Language]
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[Foreign Language] People in charge of the related departments are also joining us in this meeting.[Foreign Language] First of all, the General Manager and Chief Accountant of the company, Mr. Huang will review the business performance for the third quarter results of 2023, followed by Q&A section.[Foreign Language]May we have the honor to invite Mr. Huang to review the business performance, and Ms. Keyu Zhao will conduct the English interpretation.
[Foreign Language]
[Interpreted] Ladies and gentlemen, good afternoon. Welcome to the third quarter results conference call of Huaneng Power International. Yesterday, the company has released the operating results. Please let me give a brief introduction.
[Foreign Language]
[Interpreted] In the third quarter, the company analyzes changes in power coal -- capital markets push forward tasks of operating transition and development. The operating result improved significantly. Under the Chinese accounting standards, the company achieved a consolidated operating revenue of CNY 191.322 billion in the first 3 quarter, increasing by 4.01%. Net profit attributable to the company's shareholders was CNY 12.56 billion, increasing by CNY 16.5 billion. The earnings per share was CNY 0.66.
[Foreign Language]
[Interpreted] In terms of power generation facing relatively short duration of high temperatures and increased hydro output, the company researched the power market and ensured healthy operations. Ensuring peak supply and system regulation, the company's thermal power generation increased. The growth in renewable capacity also contributed to the increase in renewable generation.In the first 3 quarters, the company's domestic on-grid power sales was [ 337.38 ] billion kilowatt hours, increasing by 5.38%. The average utilization hour was 2,870 hours. The average tariff was CNY 509.66 per megawatt hour, increasing by 0.62%. All the indicators remain about the same level and have a slight increase.
[Foreign Language]
[Interpreted] In terms of coal supply, the company monitors the market changes for fuel contracted coal with high quality, ceased opportunities of imported coal and optimize inventory structure to control the fuel cost. The unit fuel cost of the first 3 quarter was CNY 332.52 per megawatt hour, a year-on-year decrease of 12.18%.
[Foreign Language]
[Interpreted] In terms of development, focusing on the government's requirements of a new power system, the company is pushing forward clean energy development. In the first 3 quarters, the company added 5.57 gigawatts of units, including 1,016 megawatts of wind power, 3,409 megawatts of solar power, 495 megawatts of gas-fired power and 650 megawatts of coal-fired power. By the end of September, the company's installed capacity reached 131.511 gigawatts. Wind and solar capacity reached 24.17 gigawatts. Low carbon clean energy accounts for 28.85% of total capacity.
[Foreign Language]
[Interpreted] In terms of overseas operations, Tuas closely monitor changes in power and fuel market optimized competition strategy and ceased the market opportunity, raised the marginal contribution. The company have achieved a better operating performance. The profit had increased continuously. In the first -- [ third quarter ], the profit before tax was CNY 3.64 billion, increasing by CNY 2.48 billion. The projects in Pakistan has maintained a stable operation.
[Foreign Language]
[Interpreted] In the first quarter, the company will continue the clean energy development and accelerate the transition, track the coal market, optimize the supply structure, prepare for the next year's contract signing and control fuel costs, conduct market research, respond to the market changes, ensure power supply and stabilize the tariff and strive for profitable power generation, expand financing channels with green financing policies to reduce cost and improve efficiency. Facing complicated market situation, the company will seek progress, while maintaining stability, focusing on quality and profitability and complete the full year target in production, operation and development.
[Foreign Language]
[Interpreted] Now my colleague and I would like to answer your questions. Thank you.
[Foreign Language] Thank you, Mr. Huang. Here, we come to the Q&A session. [Operator Instructions] The first question comes from Citibank of Pierre Lau.
[Interpreted] I have three questions. First, about the company's unit fuel costs. As in the first [ three ] quarter, the company unit fuel costs have dropped, could you please talk about the outlook of the unit fuel costs in the first quarter and in the year 2024?Second, as the company's unit fuel costs have dropped this year, could you give us an outlook about the company's on-grid tariff of the market-based power sales?Third question is about renewable energy development. As the PV module price have dropped less than CNY 1 per watt, what would be the company's investment hurdle rate about the solar project?
[Foreign Language]
[Interpreted] First, please let me answer your question about the fuel procurement. In 2023, the supply of the coal domestically maintained at high level and the export coal have increased. As for the demand side, the demand of the domestic consumption was less than expected. So the supply and demand structure have improved in this year.
[Foreign Language]
[Interpreted] [ Plus ], the government still have the policy about the long-term contracted coal with the -- with both help with the market and the policy, the supply and demand structure have eased up.
[Foreign Language]
[Interpreted] In the first 8 months, the average price of the North Port was about CNY 976 per ton. It has CNY 247 per ton decrease comparing to the same period last year.
[Foreign Language]
[Interpreted] However, after the third quarter, as there are some incidents in the coal mines, the safety inspection have become more and more and the production of the coal mine has decreased.
[Foreign Language]
[Interpreted] The coal price has bounced in the off-season. And as in September, the 5,500 kcal coal in the North Port reached CNY 980 per ton.
[Foreign Language]
[Interpreted] And in the fourth quarter, as from the supply side, the safety inspection continues and the supply from the overseas market was limited, plus there is some interference from the overseas market.
[Foreign Language] [Interpreted] From the demand side, as the macroeconomy is continuing to recover and the non-electricity industry have high consumption, such as the chemical industry, and with the heating supply coming away, the consumption will maintain high. So that will be a support for the coal price. [Foreign Language]
[Interpreted] However, considering the inventory was at high level, compounding all these factors above, we think in the fourth quarter, the coal price will maintain strong and stable.
[Foreign Language]
[Interpreted] About the contract signing in 2024, the company had begun the contract signing preparation in September. It's 1 months or 2 months earlier than we used to do.
[Foreign Language]
[Interpreted] However, the specific details will be in line with the government release document. We are still waiting for the issue of this document. So the company will continue with the government support to sign the contracts, as early as possible and strive for a better-quality contract sign of our long-term goal.
[Foreign Language]
[Interpreted] About the market-based power contract sign, the process will begin in November and will end in January next year.
[Foreign Language]
[Interpreted] However, the provincial detailed policies of about contract signing haven't been released, considering there might be the capacity payment policy coming out, the company will keep track on the signing of our contracted power.
[Foreign Language]
[Interpreted] The company will [ help us ] with our subsidiaries about a certain rule that the tariffs won't be less than the market average, and the market share won't be less than what we guide.
[Foreign Language]
[Interpreted] About company's return rate of solar projects, as the PV module price has decreased, the company's recent project, the return rate was around 5.2% to 13%, and it varies in different projects.
[Foreign Language]
[Interpreted] The company's investment hurdle rate was 6%, and the actual return rate was different in different provinces. Most of our projects can achieve this goal that most of our project return rate is higher than 6% other than some exceptionals only a very few projects.
[Foreign Language] The next question comes from Yalin Li of HuaTai Securities.
[Interpreted] I have 3 questions. First, as the company have transferred the Sichuan Hydropower in the third quarter, so could you talk about the company's investment gains from this transfer? And what is the net profit attributable to the shareholders, what was the impact? And about the company's investment gain from previous year -- previous months, what will be the method of accounting to deal with this part of gains?Second, about the company's wind projects, as in the third quarter, the profit of wind is less than our expected. Could you talk about the reason for that?Third, could you please give us the net profit and profit attributable to shareholders, as well as the net asset and net equity of different energy resources in the third quarter?
[Foreign Language]
[Interpreted] First, please let me answer your question about investment gain of [ Sichuan Hydropower ]. The sale of the Sichuan Hydropower have the profit before tax of CNY 2.1 billion impact to our profit before tax.
[Foreign Language]
[Interpreted] About the profit attributable to our shareholders because the company have a combined loss, so we don't have to pay tax in this process. So it has the same impact to our profit attributable to shareholders.
[Foreign Language]
[Interpreted] And the company have recorded investment gains in -- about [indiscernible] hydropower in the first 6 months, and the gain or loss of this will be addressed later.
[Foreign Language]
[Interpreted] About your question of the profit decrease in our renewable sector, the utilization of wind have decreased 21 hours in the third quarter comparing to the same period last year. The utilization hour of solar have decreased 30 hours.
[Foreign Language]
[Interpreted] As more and more the projects that without the feed-in tariff was put into operation, the tariff of market -- the market-based tariff of wind and solar have decreased.
[Foreign Language]
[Interpreted] It has affected the compound tariff of the renewable energy. And for our wind sector, the average tariffs have decreased by 8.3% in the third quarter.
[Foreign Language]
[Interpreted] Because the company's power plants may have different energy sources, so it's only a reference for you. And profit attributable to equity holders breakdowns as follow. The -- for Coal-fired sector, it was CNY 2.19 billion for gas-fired, it was CNY 250 million, for wind sector, it was CNY 4 billion, for solar sector, it was CNY 1.47 billion, hydro sector, CNY 30 million and is breakeven for biomass sector.
[Foreign Language]
[Interpreted] And for the net equity breakdowns different energy resources. For fired sector, it was CNY 72 billion, for gas sector, it was CNY 12 billion, wind sector, CNY 50 billion; solar sector, CNY 18.8 billion, hydro sector, CNY 1.3 billion, and for biomass sector, it was -- sorry, CNY 900 million.
[Foreign Language]
[Interpreted] As for the investment gain, we have already recorded about the Sichuan Hydropower. Does that -- do you mean that the -- in the investment gain in the first 6 months will be adjusted in the fourth quarter.
[Foreign Language]
[Interpreted] In the first 6 months because the transaction hasn't happened, so we have recorded the investment gain of Sichuan Hydropower.
[Foreign Language]
[Interpreted] And as the transaction completed in September, the company has already addressed the investment gain in the third quarter, it was about CNY 100 million.
[Foreign Language] The next question comes from GF Securities, Tao Huang.
[Interpreted] I have three questions. First about company's cash flow. As the company cash flow have improved in the third quarter, was that because the renewable subsidiaries, as the government have released CNY 8.6 billion subsidiary -- subsidies in the first half of the year, what was the company collection of renewable subsidies?And second question is about the company ancillary service payment. So in the third -- in the first third -- 3 quarters, what is the amount of ancillary service fee that we received. And by what proportion is the capacity payment?Third, about the company's Singapore sector. As the price of the power have increased to SGD 245.2 per kilowatt hour, and it was 30% higher than the average price in the third quarter. Does that mean that company's performance will be higher than the third quarter?
[Foreign Language]
[Interpreted] About the company cash flow changes in the third quarter, yes, because the company's operating cash flow -- inflow was CNY 19.9 billion in the third quarter. It has CNY 7.6 billion increase compared to the second quarter, which is CNY 12.3 billion.
[Foreign Language]
[Interpreted] Combining all the [ results ] from EBITDA to the investment gain from the [ Sichuan Hydropower ], actually, the operating cash flow haven't had changed from the second quarter to the third quarter. It has about CNY 1 billion increase.
[Foreign Language]
[Interpreted] The reasons as follows: first, the renewable subsidies, we have [ clapped ] CNY 1.2 billion in the third quarter.
[Foreign Language]
[Interpreted] Second quarter, we have relatively less collection of the subsidies. The main reason about the changes in operating cash flow is because of the inventory. In the second quarter, the inventory has increased, so the operating cash flow has decreased accordingly. The number was about CNY 4 billion.
[Foreign Language]
[Interpreted] So in the third quarter, because the consumption of the coal, and it leads to a decrease in our procurement of fuel. And comparing to the second quarter, actually, it has CNY 7 billion change.
[Foreign Language]
[Interpreted] And the power collection -- power collective fees in the third quarter also have increased in the third quarter. So combining all the factors, our operating cash flow have increased in the third quarter.
[Foreign Language]
[Interpreted] About the company's ancillary service payment in the third quarter, in total, the ancillary service revenue was CNY 1.892 billion. The fee from the peak adjustment was about CNY 1.51 billion, and the fee from the [ frequency ] adjustment was about CNY 381 million.
[Foreign Language]
[Interpreted] About the capacity payment in the first three quarter from our gas sector, it was about CNY 913 million. And from our coal sector, actually, the capacity payment was calculated in our on-grid tariff in Shandong province.
[Foreign Language]
[Interpreted] About the [ company's ] Tuas performance in the first three quarter. First, please then give you some numbers. The profit before tax of Tuas in the first quarter was CNY 966 million. In the second quarter, it was CNY 1.924 billion. In the third quarter, it was CNY 751 million.
[Foreign Language]
[Interpreted] In the third quarter, the Tuas revenue was about CNY 751 million and it's maintained at a high level. The profit have increased by CNY 333 million.
[Foreign Language]
[Interpreted] However, in the third quarter, as the power consumption demand has decreased in Singapore market with about 2.67% and the capacity have increased in the Singapore market. And also, the government have introduced the tariff cap in the market. The tariff in the wholesale market has decreased. It has influence about the company's profit before tax, and it has decreased in the third quarter comparing to the second quarter, about CNY 1.173 billion. That's mainly due to the marginal contribution have decreased.
[Foreign Language]
[Interpreted] The market situation hasn't had a great change in the fourth quarter. It's a better environment for us comparing to the previous years.
[Foreign Language]
[Interpreted] Considering the supply and demand structure in the power market in Singapore, as well as the policy changes, in the first quarter, we think there won't be great volatility in the wholesale tariffs and the price will maintain stable. And the high tariff will be limited by this market situation and government movement and the marginal gain will drop back to a reasonable level. The Tuas Power will continue to strive for better operating performance in the first quarter.
[Interpreted] I have a follow-up question. So that the capacity payment was included in the ancillary service payment.
[Foreign Language]
[Interpreted] Actually, it's 2 independent payment system. It was calculated independently.
[Foreign Language] The next question comes from Yingying Song of Merchants Securities.
[Interpreted] I have three questions. First about the company's coal inventory. As you just said, in the second quarter, the coal procurement have increased, however, decreased in the third quarter. So could you talk about the current inventory level? And could you give us an outlook about the coal supply and demand in the next year?Second, could you give us a breakdown of company's standard coal price?Third, could you talk about the loss situation about the company's thermal power and what will be the company's asset impairment in this year?
[Foreign Language]
[Interpreted] About the company's coal inventory up until yesterday, the company's coal inventory was [ 14.47 million tons. It has a 1.45 million tons ] increase comparing to the same period last year and the inventory days was about 30 days.
[Foreign Language]
[Interpreted] About the first quarter coal price that we have just said about that topic earlier. And in the -- in next year, the company will strictly apply the government policy about signing and will strictly control the coal price that we purchase from the spot market and will fulfill our long-term goal with high quality and take multiple pressures to control our coal price.
[Foreign Language]
[Interpreted] About the company's standard coal price in the first 9 months, the standard coal price tax excluded was CNY 1,097 per ton. It has CNY 161 per ton decrease year-on-year.
[Foreign Language]
[Interpreted] The standard coal price of coal sector was CNY 1,045 per ton. It has CNY 171.5 per ton decrease comparing to the same period last year.
[Foreign Language]
[Interpreted] The standard fuel price for gas sector was CNY 2,140 per ton. It stayed at the same level comparing to the same period last year.
[Foreign Language]
[Interpreted] The standard coal price in the third quarter alone, the compound standard coal price was CNY 1,033 per ton. For coal sector, it was CNY 978 per ton. For gas sector, it was CNY 2,104 per ton.
[Foreign Language]
[Interpreted] About the company's loss situation of our thermal sector, as the coal price dropped this year and with the government policy, the company's loss situation have improved in the first 9 months. In the first 9 months, the company's loss situation was up -- [ 51% of power plants ] made loss comparing to the last year's 76%. And in the third quarter alone, the -- only 27% of our power plants have made loss.
[Foreign Language]
[Interpreted] The company always strictly apply the accounting standards and the disclosure rules of our supervision authorities when the company evaluates our impairments.
[Foreign Language]
[Interpreted] The company's aim is to objectively reflect the fairness and the authentic of our asset valuation.
[Foreign Language]
[Interpreted] The company will evaluate the impairment size at the end of each quarter and have a professional test with the help of the evaluation companies, and the company will strictly apply certain rules and to test for the impairment size.
[Foreign Language]
[Interpreted] The asset impairment will be also -- be looked through by the -- by our auditors, and it will all strictly apply the accounting standard. The company cannot and will not have certain guidance or outlook for our impairment.
[Foreign Language]
[Interpreted] So the company will combine the market situation, as well as for the market environment to judge for impairment size in following process.
[Foreign Language] The next question comes from [indiscernible].
[Interpreted] I have three questions. First, could you please break down the tariff of the thermal power in the third quarter?Second, could you talk about the market-based tariff for our wind and solar projects and also the proportion of market-based power sales and with the tariff discount comparing to the benchmark?Third, about the company's solar projects [Technical Difficulty] 57:59 from 5% to 13%. So could you clarify if it's the -- the IRR for the project or for the equity?
[Foreign Language]
[Interpreted] About the breakdown of the tariffs of our thermal power in the first three quarter, the coal tariff was about CNY 484.96 per megawatt hour and tariff for gas was about CNY 700.7 for megawatt hour.
[Foreign Language]
[Interpreted] So the market-based power sales for the wind power accounts for 29% -- 29.8% of our -- the wind power sales and the market-based power sales of solar power accounts for about 27%. The -- about the tariff, the market-based tariff of wind power has a 2.7% discount comparing to the benchmark. And for the solar power, it has a 6.2% increase comparing to the benchmark.
[Foreign Language]
[Interpreted] The company's IRR is for the -- is for pretax project IRR.
[Interpreted] The coal price -- the coal tariff in the third quarter was CNY 484.96 per megawatt dollar. It was lower than the same period last year. So could you talk about the reasons?
[Foreign Language]
[Interpreted] In the third quarter, the market-based tariff for the coal-fired sector was CNY 481.8 per megawatt hour. It has a 1.6% decrease comparing to the same period last year. That was mainly because in the third quarter, there is great output in hydro and renewable sector, the thermal power -- power generation has decreased.
[Interpreted] I have a follow-up question, why the company maintained a relatively high inventory days about 30 days?
[Foreign Language]
[Interpreted] The company [ attach ] great importance to the energy supply and have implemented the government policy and enhance our management in the coal procurement and operation.
[Foreign Language]
[Interpreted] In the first 9 months, the company has maintained inventory at a high level, that's mainly because the company's management strategy to consume in the off season -- and consume coal in the off season and generating power in the peak season. So that company take multiple measures to control the coal cost.
[Foreign Language]
[Interpreted] And our inventory days is 30 days moving average and was calculated considering our power generation.
[Foreign Language] The next question comes from Vento Suen [indiscernible].
[Interpreted] I have three questions. First, you just said the proportion of market-based power sales in wind and solar sector. So could you please tell us about the year-on-year changes in the market proportion?Second, about the renewable energy that sells in the market. Could you please divide that into the small market and medium to long-term contract? And could you talk about the difference between the tariffs in the 2 markets?Third, you just said, the coal tariffs have decreased quarter-on-quarter. Could you talk about in what provinces that have a higher decrease? And could you talk about the reasons for that?
[Foreign Language]
[Interpreted] About the proportion of market-based power sales for renewables, the proportion of the wind power that sells in the market has a 3% increase in the third quarter comparing to the second quarter. The market-based solar power sales proportion have a 4.1% increase comparing to the second quarter.
[Foreign Language]
[Interpreted] About market-based power sales of our coal sector, the annual contracts accounts for 65% of our total sales, monthly bidding contract accounts for 31.1%, and the power sales in the spot market accounts for 3.3%.
[Foreign Language]
[Interpreted] And in August and September, the market-based tariff for coal sector has decreased, especially for the tariff from monthly bidding in province like [ Guangdong ] and Shanxi. In Shanxi in September, the market-based tariff only have 13.7% increase comparing to the benchmark. In Guangdong, in September, the monthly bidding tariff only was high 10% higher than the benchmark.
[Interpreted] I have a follow-up question about the market-based tariff for renewable. So could you talk about the changes in the third quarter because our revenue from wind -- from the renewable have decreased, so is that because more projects that without a feed-in tariff was put into operation? Or is that because the market-based power sales increased? Or is that because the tariff of market sales have decreased?
[Foreign Language]
[Interpreted] So in the third quarter, the power generation of wind have increased by 7.1%. Power generation of solar have increased by 86.3%. From this figure, we can see that the project that without feed-in tariffs have been put into operation in the third quarter.
[Foreign Language] The next question comes from Jie Wu of Haitong Securities.
[Interpreted] I have three questions. First, could you please talk about the dividend payout policy in the next year?Second, could you talk about the coal consumption rate in the first three quarters?And third, you just said the market-based tariff was higher than the benchmark of solar power, so could you talk about the reason?
[Foreign Language]
[Interpreted] First, the company's dividend payout have accumulated to CNY 62.7 billion from the year of 1998.
[Foreign Language]
[Interpreted] And the company's dividend payout policy was written in our articles of association. If the company has profit and the undistributed profit was positive, the company's cash flow can satisfy the company's operation and development. The company will pay out a cash dividend on this year.
[Foreign Language]
[Interpreted] The company's dividend payout ratio were not less than 50%.
[Foreign Language]
[Interpreted] The article of association haven't changed. The company will make judgment considering the profit situation this year, as well as the company's capital demand next year. [Foreign Language] [Interpreted] The coal consumption rate in the first three quarter was 294 gram per kilowatt hour.
[Foreign Language]
[Interpreted] In the third quarter, the company's market-based power tariff for our solar projects have a 5.3% decrease year-on-year. However, in the first 3 quarters, the tariff of market sale -- market sales have increased by 0.1% year-on-year. And the solar market-based power have a 3.4% increase compared to the benchmark. That was mainly due to the green market transaction and as well as our distributed form of power sales of solar.
[Interpreted] So could you explain why in the green market, the solar power can have an increase compared to the benchmark, while the wind power has decreased, is that because of the different type of the energy sources?
[Foreign Language]
[Interpreted] So in the first 3 quarters, the market sales in the green market amounted to 2.877 billion kilowatt hour, and tariff has an 18.38% increase comparing to the benchmark. And wind and solar projects all participate in the green market.
[Foreign Language] The next question comes from Xiujie Huang of Guosen Securities.
[Interpreted] I have three questions. First, could you please talk about the subsidy situation [ with ] the company's outstanding subsidy receivables by the end of September. And from what years does the subsidy have accumulated?And second, in the third quarter, could you please talk about the month-to-month change in our standard coal price?Third, you just said about the equity breakdown to different energy sources, is that our net equity or is that equity attributable to equity holders?
[Foreign Language]
[Interpreted] First, about your question about subsidy. By the end of September, the renewable energy subsidy receivable was CNY 16 billion.
[Foreign Language]
[Interpreted] It's mainly from 2021 to 2023. In 2022, we have accumulated [ CNY 6.8 billion ], and in 2023, accumulated [ CNY 5.6 billion ].
[Foreign Language]
[Interpreted] Our projects, we don't have the exact number from month to month of our standard coal price. But from the first three quarter, the trend was downward.
[Foreign Language]
[Interpreted] And the equity breakdown was for our equity, not the equity attributable to the shareholders.
[Foreign Language] Due to time [ restrictions ], we invite the last investor to ask.[Foreign Language] The next question comes from [indiscernible].
[Interpreted] I have three questions. First, you just said about the 50% payout ratio, so in which year the company has written this in our articles of association and by what process can the company change this rule?And second, about the newly added capacity for wind and solar. The company has added about 4 gigawatts of renewable capacity. It's about the same level as last year. However, our CapEx was significantly higher than last year. So could you talk about the reason? Is that because our investment increase for the -- for our solar and wind. Is that because the unit investments have increased?And third, about the company's target of renewable capacity. This year, the company's target was 8 gigawatts. However, the company only accomplished about 56%. Will the company face more pressure in the [ fourth ] quarter?
[Foreign Language]
[Interpreted] The company has always attached great importance to the dividend payout since the very beginning since we are listed, and the company always maintain a positive, stable and increasing returns to our shareholders and the 50% payout ratio [ have last ] for years. The company always implemented our rules. And for our future potential changes, I think that will be based on our development, and our profit and also our requirements from the shareholders. The company will adjust our dividend payout. And as you know, the change in article of associations implement the procedure from our shareholders' meeting.
[Foreign Language]
[Interpreted] About the construction of our renewable energy in the first 9 months, the company had put 8,995 megawatts into construction that accomplished 107% of our target, and the company have put 4,424 megawatts into operation that accomplished 73% of our annual goal. And by the end of September, the company's capacity that still under construction amounted to 13.242 gigawatts because the company has a great amount of projects that under construction that leads to a higher investment this year. And for now, all the projects are going smoothly. And in the [ first ] quarter, there will be a peak for our projects that are put into operation. The company will strive to accomplish this year's capacity goal.
[Interpreted] What is the company's unit investment for our wind and solar project?
[Foreign Language]
[Interpreted] The construction cost of our inland wind was about [ CNY 5,700 ] per kilowatt. And for our solar project, it was [ CNY 3,800 per kilowatt to CNY 4,100 per kilowatt ].
[Foreign Language] Thank you so much for all of the questions and participation today.[Foreign Language] Finally, Mr. Huang would like to give us a summary.
[Foreign Language]
[Interpreted] Thanks for participating in the conference call. Thank you for your continued support. Here we come to the end of today's conference call. Please contact our IR department if you have any further questions. Thank you.
[Foreign Language] Thanks, again for your attendance of the conference call regarding the third quarter results announcement of 2023. We are looking forward to meeting with all of you in our next results announcement. Thank you.[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]