Core view
Electricity reform has entered the deep water area, and the reform of coal electricity price mechanism has ushered in significant progress. All coal electricity has entered the market, the floating range of electricity price has been expanded to ± 20%, and there is no upper limit for high energy consuming enterprises. Establishing a market-oriented mechanism of “rising and falling” at both ends of power generation and consumption will help promote the construction of various markets such as medium and long-term power trading, spot market, auxiliary service market and capacity market. Give more flexible space for market price changes, so that the electricity price can more flexibly reflect the power supply and demand situation and cost changes.
Under the background of “carbon neutrality”, the power supply structure has ushered in deterministic changes, and the new energy operation industry dominated by wind power and photovoltaic will open up long-term growth space. In the long-term feast of new energy power generation investment, traditional power enterprises facing transformation will become important participants, and new energy will be built as the “second growth curve”. Its significant advantages are the strong cash flow brought by thermal power basic plate, highly competitive financing cost and strong ability to obtain project resources. From the perspective of planning, the new energy installed capacity of several groups has a potential space of 4-5 times in five years.
New energy operation highlights the growth attribute, and thermal power assets are also expected to usher in a bottom reversal. The fundamentals of thermal power are in the dark, and factors such as coal price, electricity price and utilization hours are expected to release greater performance flexibility. The long-term dislocation of “market coal” and “planned electricity” will eventually be gradually corrected. At that time, thermal power will periodically weaken and return to the attribute of public utilities, create sufficient cash flow with stable roe return, and support the capital expenditure or considerable dividend scale of transformation and development. In the medium and long term, in the new power system with new energy as the main body in the future, the fire potential will gradually transition from electricity type power supply to flexible peak shaving power supply, and is expected to usher in a new cost recovery mechanism. The last round of cash flow in its life cycle will help thermal power enterprises to “start a second business” and “turn around”. The former thermal power leaders may have the most potential to become new energy giants in the future.
The framework of segment valuation is more suitable for such traditional power companies with rapid transformation and rapid growth of new energy. The transformation speed of new energy may continue to exceed expectations. The new energy performance contribution of some companies has been significantly higher than that of the original main business. The traditional Pb valuation system has been difficult to comprehensively and accurately reflect the growth attribute of new energy operation. The valuation of new energy assets with rapid growth in scale and stable expected yield can be benchmarked with pure new energy operators such as China Three Gorges Renewables (Group) Co.Ltd(600905) ; Traditional thermal power asset valuation is expected to usher in a bottom reversal and gradually repair to the historical valuation center of 1-1.5xpb.
The rigid demand attribute of nuclear power is unprecedented and is expected to usher in a good opportunity for acceleration. Based on the calculation of power supply and demand in the 14th and 15th five year plan, we believe that nuclear power is expected to usher in an opportunity for accelerated development. As a near zero carbon power supply, it is also the base load energy that is likely to replace thermal power on a large scale. The value of nuclear power will become more and more prominent in the new power system in the future. The calculation results under the neutral assumption show that in order to avoid the power shortage crisis, the demand for new nuclear power units may exceed 60 during the 14th Five Year Plan period.
Investment proposal and investment object
At the segment level, we are optimistic about investment opportunities in thermal power, nuclear power and new energy operations; Especially optimistic about the revaluation of the value brought by the transformation of traditional power and the development of new energy.
It is suggested to focus on Huaneng Power International Inc(600011) , China Resources Power, nuclear power + new energy two wheel drive China National Nuclear Power Co.Ltd(601985) with high-quality assets, leading efficiency and fast pace of new energy transformation. Other suggested targets include China Three Gorges Renewables (Group) Co.Ltd(600905) , Fujian Funeng Co.Ltd(600483) , Zhongmin Energy Co.Ltd(600163) , nuclear power operators Cgn Power Co.Ltd(003816) , and distribution network energy-saving listing platform under State Grid Chongqing Fuling Electric Power Industrial Co.Ltd(600452) .
Risk statement
The growth space of new energy power generation may be lower than expected; Thermal power fundamentals may continue to deteriorate; The yield level of new energy operation may be reduced; Changes in assumptions will lead to deviations in the calculation results.
