\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 905 China Three Gorges Renewables (Group) Co.Ltd(600905) )
The company is mainly engaged in the development and operation of wind energy and Cecep Solar Energy Co.Ltd(000591) and is the leader of the first tier operator of Shanxi Guoxin Energy Corporation Limited(600617) power generation in China. The company is the strategic main body of the new energy business of the Three Gorges group. As of 2021h1, the installed capacity of grid connection has reached 16.44gw, ranking the leading in the industry, and the installed capacity of Fengguang has reached 9.41gw and 6.80gw respectively. Driven by the continuous growth of installed capacity, the annual compound growth rate of the company’s revenue from 2017 to 2020 reached 18.63%, the annual compound growth rate of net profit attributable to the parent company reached 13.89%, and the company’s performance continued to grow steadily.
With the advent of the low-carbon era, the decline in investment costs and strong support from the policy side have promoted the new energy power generation industry to usher in an opportunity period of rapid development. In 2010, the installed capacity of scenery in the world and China accounted for only 5% and more than 20% in 2020. The installed capacity of new energy will continue to increase in the future. On the investment cost side, the initial investment cost of the project decreased year by year, and the economy continued to increase. In the initial investment composition, the cost of equipment and installation engineering accounts for more than 65%. Thanks to the continuous decline in the price of scenery equipment in recent years, the overall investment cost of the project shows a downward trend. On the policy side, the proposed increase in the installed capacity of Fengguang, the preferential tax policies and the provincial subsidy relay under the decline of national subsidy will empower the development of the industry. According to the carbon peak action plan, there will still be at least 560 million kw of wind and scenery installed capacity to be built before 2030. At the same time, the construction of new power system is advancing steadily, and the price elasticity is expected to increase.
Significant resource and capital advantages + all-round business layout + absolute leader of offshore wind power build the company’s competitive advantage, and the company’s growth curve is clear during the 14th Five Year Plan period. With the central enterprise Three Gorges group as the shareholder background, the company has obtained rich resource reserves, sufficient self owned cash flow and greater financing space under the low asset liability ratio. At the same time, the bank credit line is high, the bond financing interest rate is low, and the resource and capital barriers are obvious. In terms of business layout, the company covers 30 provinces in China, with an all-round layout of land and sea breeze. The company implements the strategy of “leading offshore wind power”, and takes the lead in offshore wind power construction under the first mover advantage, technical advantage and strategic layout. By 2021h1, offshore wind power has been put into operation with a scale of 1.49 million KW, and the scale under construction is 2.94 million KW, ranking first in the industry, accounting for about 20% of the scale under construction in China. We believe that with the accelerated promotion of the company’s sea breeze construction and the installation target of 50gw during the 14th Five Year Plan period, the company’s growth curve is clear.
Investment rating: we estimate that the net profit attributable to the parent company from 2021 to 2023 will be RMB 5.658 billion, RMB 7.628 billion and RMB 9.332 billion respectively, and the corresponding EPS will be RMB 0.20, RMB 0.27 and RMB 0.33 respectively. The current share price corresponds to the PE value from 2021 to 2023, which is 34.8, 25.8 and 21.1 times respectively. For the first time, give a “strongly recommended” rating.
Risk tip: the cost decline is less than expected, the project construction is less than expected, and the policy is less than expected.
