\u3000\u3000 Huaneng Power International Inc(600011) (600011)
Event:
Huaneng Power International Inc(600011) released the performance forecast for 2021: in 2021, the company realized a net profit attributable to the parent company of – 11.7 ~ – 9.8 billion yuan, compared with 4.565 billion yuan in the same period of last year; The net profit attributable to the parent company after non deduction was – 14 ~ – 12.1 billion yuan, up from 4.398 billion yuan in the same period last year. In 2021q4, the net profit attributable to the parent company was -12.48 ~ – 10.58 billion yuan, compared with -4.568 billion yuan in the same period of last year; The net profit attributable to the parent company after non deduction was -14.21 ~ – 12.31 billion yuan, compared with -4.454 billion yuan in the same period of last year.
Key investment points:
The sharp rise in coal prices dragged down the company’s performance.
1) in 2021q4, the net profit attributable to the parent company was -12.48 ~ – 10.58 billion yuan (compared with -4.568 billion yuan in the same period of last year), which was mainly due to the sharp rise of domestic coal purchase price year-on-year. Q4 kwh profit was -11.7 ~ -9.88 points / kWh), which was -4.39 points / kwh in the same period of last year.
2) the net profit attributable to the parent company in 2021 was – 11.7 ~ – 9.8 billion yuan, mainly due to the large loss in the fourth quarter. The electricity profit in 2021 was -2.72 ~ -2.28 cents / kWh (0.24 cents / kwh in the first three quarters of 2021), and 1.2 cents / kwh in the same period of last year.
The dark hour has passed, and the profit of thermal power business is expected to hit the bottom and rebound
1) in terms of cost, the coal supply was tight in 2021. From September to November, the average price of Qinhuangdao Power coal increased sharply by 143% year-on-year to 1471 yuan / ton. However, under the influence of the continuous introduction of coal supply guarantee policy, the price of power coal is expected to return to a reasonable range. From December 2021 to the end of January 2022, the average price of Qinhuangdao thermal coal dropped to 982 yuan / ton, down 33% from September to November 2021.
2) in terms of electricity price, on October 8, 2021, the executive meeting of the State Council raised the upper limit of coal market-oriented transaction electricity price to no more than 20%, and the transaction electricity price of Jiangsu, Zhejiang and other places rose to the upper limit of 20%. The coal price returns to a reasonable range, superimposes the market-oriented transaction price of coal, further straightens out the cost transmission mechanism of coal price, and the company’s thermal power business profit is expected to hit the bottom and rebound.
The transformation of new energy in the 14th five year plan is accelerated, and the company’s fundamentals are expected to be further improved.
Accelerate the transformation of new energy companies. According to the targets proposed at the 2020 performance meeting of the company, the company expects the annual average new energy expenditure to be 56-65 billion yuan during the 14th Five Year Plan period, and the annual average new installed capacity of wind power and photovoltaic power is more than 8GW (the annual average of the 13th five year plan is only 1.37gw). Since 2021, the transformation of the company’s new energy business has accelerated. In 2021h1, the installed capacity of wind power + photovoltaic reached 11.3gw, accounting for 9.91% of the company’s controllable power generation installed capacity. In 2021, the sales of wind power and photovoltaic power were 19.867 billion kWh and 3.408 billion kwh respectively, with a year-on-year increase of 46.78% and 46.9% respectively.
Profit forecast and investment rating
Huaneng Power International Inc(600011) is the leader of thermal power in China. In the short term, under the background of coal supply guarantee policy and market-oriented reform of coal price, the price of electric coal is expected to return to a reasonable range, and the performance reversal of thermal power business of the company is imminent; In the medium and long term, the company is an important platform for the development of new energy under Huaneng Group. The transformation of new energy business during the 14th five year plan is accelerated, which is expected to further improve the company’s fundamentals. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be -10.453/10.116/12.183 billion yuan respectively, and the corresponding PE from 2022 to 2023 will be 11.48x/9.53x respectively. It will be covered for the first time and given a “buy” rating.
Risk tips
Policy promotion is less than expected; The new installed capacity is less than expected; Coal prices rose sharply; Electricity price reduction; Intensified industry competition, etc.
