Shanghai Electric Power Co.Ltd(600021) (600021)
Local power leaders continue to promote the layout of scenery: the company is one of the main listing platforms of SDIC. By the third quarter of 2021, the company’s holding installed capacity had reached 17.09gw, of which clean energy accounted for 50.11%. As a thermal power enterprise, the company involved in new energy earlier. As of the third quarter, the company’s installed capacity of new energy accounted for 36.25%, that of wind power was 3.1gw, accounting for 18.10%, and that of photovoltaic power generation was 3.07gw, accounting for 17.98%. According to the company’s latest equity incentive policy, the proportion of clean energy will continue to increase during the “14th five year plan” period, and the growth of new energy installed capacity can be expected.
Vigorously develop new energy and lead the scale of new energy projects under construction: from the situation of projects under construction, the company has strong certainty of short-term installed capacity growth, with about 1GW of new energy under construction. According to the company’s interim report, by the end of June, the ending balance of the company’s projects under construction had reached 17.89 billion yuan, of which the ending balance of new energy projects under construction was 8.22 billion yuan. The short-term installation and operation is expected to bring high performance flexibility. In terms of wind power, according to the China news, the company has three offshore wind power projects under construction, namely Jiangsu Rudong h4400mw offshore wind power project, Rudong h7400mw offshore wind power project and Shanghai Fengxian 200MW offshore wind power project. Among them, Jiangsu Rudong H4 and H7 projects have been connected to the grid recently, and the full capacity of offshore wind power generation next year is expected to bring a significant increase in new energy power generation. In terms of photovoltaic, the company’s photovoltaic projects under construction have an installed capacity of 242000 kW. Due to the short construction cycle of photovoltaic projects, the photovoltaic projects under construction are expected to be put into operation by the end of the year. Overall, it is expected that the new installed capacity of the company’s new energy sector is expected to reach 1.9gw in 2021, bringing greater performance flexibility in the short term.
Coal price and electricity price policies have been issued one after another. It is expected that there will be no drag on the thermal power performance in 2022: in 2021, due to the sharp rise of coal price in the third quarter, the thermal power performance of the company is under pressure, and the coal-fired power plants generally suffer losses, with a loss of 316 million yuan in the third quarter alone. In the fourth quarter, coal price and electricity price policies were issued successively. In terms of electricity price, the national development and Reform Commission issued the notice on further deepening the market-oriented reform of on grid electricity price of coal-fired power generation in October to promote the 100% marketization of coal power. At the same time, the floating range of power market price is expanded, the floating range from top to bottom is no more than 20%, and high energy consuming industries are not limited. In terms of coal price, the national coal fair published the draft for comments on the signing and performance plan of long-term coal contract in 2022, raised the benchmark price of Changxie coal to 700 yuan / ton, up from 535 yuan / ton, and set a price adjustment range of 550-850 yuan / ton for thermal coal. Overall, the company’s thermal power sector is less likely to suffer losses in 2022, which will not drag down the new energy sector.
Carry out the first equity incentive to show confidence in future development: the company issued the first phase of stock option incentive plan in early December, and plans to grant stock options to no more than 159 directors, senior executives, middle-level and core backbone personnel of the company, with a total of 49.79 million shares, accounting for 1.9% of the total share capital. In terms of assessment criteria, this incentive has three indicators: roe, compound growth rate of net profit and proportion of clean energy installed capacity, From 2022 to 2024, ROE (deduction of Non Profits) is required to be no less than 4.5%, 5% and 5.5% respectively, the compound growth rate of net profit is no less than 11%, and the proportion of clean energy installed capacity is no less than 54%, 56% and 58% respectively. From past performance, roe of the company in 2020 (excluding non-profit) is 4.15%, and the installed capacity of clean energy accounts for 49.1%. In order to meet the exercise conditions, the installed capacity and overall performance of new energy must ensure stable growth, highlighting the company’s confidence in future development.
Investment suggestion: in 2021, several offshore wind power projects of the company will be put into operation, and the short-term installed scale of new energy will have great flexibility and strong certainty. After superposition, there will be no drag on the thermal power performance next year. We expect that the company will have great performance flexibility in 2022. We expect that the revenue growth rate of the company from 2021 to 2023 will be 14.7%, 28.2% and – 0.7% respectively, and the net profit growth rate will be – 22.2%, 291.4% and 36.3% respectively, with outstanding growth; The investment rating of Buy-A is given for the first time, and the six-month target price is 20.6 yuan.
Risk tips: policy promotion is less than expected, project progress is less than expected, and power demand is less than expected
