\u3000\u3000 China Three Gorges Renewables (Group) Co.Ltd(600905) (600905)
Event: the company issued a performance forecast, and it is expected to realize a net profit attributable to the parent company of 5.57-5.83 billion yuan in 2021, with a year-on-year increase of 54.3% – 61.5%; It is expected to realize a net profit of 5.10-5.33 billion yuan, a year-on-year increase of 46.5% – 53.1%. According to the calculation, the net profit attributable to the parent company in the single quarter of 2021q4 was 1.57-1.83 billion yuan, with a year-on-year increase of about 96.7% – 129.2%; The net profit deducted from non parent company was RMB 1.08-1.31 billion, with a year-on-year increase of about 31.6% – 59.6%. The performance growth is mainly due to the increase of power generation of newly put into operation projects and the increase of investment income of the industrial chain. The performance is in line with expectations.
The power generation continues to grow and the performance continues to improve. The company’s total power generation in 2021 was 33.069 billion kwh, an increase of 42.5% over the same period last year. Among them, onshore wind power generated 19.458 billion kwh, a year-on-year increase of 46.1%; Offshore wind power generated 3.331 billion kwh, a year-on-year increase of 37.0%; Photovoltaic power generation completed 9.499 billion kwh, a year-on-year increase of 42.9%; Hydropower generated 781 million kwh, a year-on-year decrease of 3.0%. The increase of the company’s total installed capacity and the gradual production of new projects have driven the continuous improvement of performance.
It is proposed to invest in several projects to help expand the installed scale. According to the company’s announcement, the company deliberated and approved: 1) invest in the construction of Qingzhou 5, 6 and 7 offshore wind power projects, and the approved planned installed capacity is 1 million KW, with a total installed capacity of 3 million KW; 2) Invest in Changyi marine ranch and the 300 MW offshore wind power integration test demonstration project of the Three Gorges; 3) Invest in the 2 million KW photovoltaic sand control project in Kubuqi, Mengxi base; 4) Invest in China Three Gorges Renewables (Group) Co.Ltd(600905) 550000 kW wind power project in Maitreya West, Honghe Prefecture, Yunnan Province. The company mainly expands its business through mergers and acquisitions and self construction, and continues to help the company expand its installed capacity.
The scale of offshore wind power under construction ranks first, with abundant reserve resources. By 2021h1, the company’s installed capacity under construction was 5.228 million KW, including 4.5 million kw of wind power projects (2.936 million kw of offshore wind power, 1.564 million kw of onshore wind power) and 722000 kW of photovoltaic power generation projects. The scale of offshore wind power under construction accounted for about 20% of the country’s total, ranking first in the industry. According to the company’s official website, the company has obtained more than 30 million kw of sea wind resources, more than 30 million kw of land wind resources and more than 30 million kw of photovoltaic resources. With the continuous development of reserve resources, the company has broad growth space in the future.
Profit forecast and investment suggestions. The company belongs to the first tier of new energy operators, and the installed capacity of offshore wind power ranks first. According to the group’s planning, the installed capacity of the company is expected to increase by more than four times compared with the current one. We expect that the EPS from 2021 to 2023 will be 0.20/0.29/0.41 yuan respectively. It is estimated that the net profit attributable to the parent company in the next three years will be nearly 50% gagr. We will give the company a 22-year 28 times valuation and raise it to the “buy” rating, corresponding to the target price of 8.12 yuan.
Risk warning: the construction of wind power generation project is less than expected, the risk of subsidy change and the risk of electricity price change.
