Power investment energy (002128)
The coal regional market demand is strong, and the price increase of the long-term association promotes the stable growth of performance
The company’s subordinate mines have a production capacity of 46 million tons / year, all of which are open-pit mining, and the production cost has a significant advantage in the current A-share power coal company. At the same time, the company is located in the east of Inner Mongolia, and its coal products are sold to Jilin and Liaoning. Under the background of capacity removal and insufficient new capacity, the supply and demand gap continues to expand, and the company has unique geographical advantages. In terms of price, the benchmark price of Qinhuangdao long-term association is expected to increase from 535 yuan / ton to 700 yuan / ton in 2022. The company’s long-term association accounts for a relatively high proportion. Although the increase cannot be exactly the same, the price center is expected to increase steadily. Huo meihongjun (51% equity) of the company has an electrolytic aluminum equity production capacity of 860000 tons / year (corresponding to the company’s equity production capacity of 438600 tons / year), its own power plant, leading the industry in profitability and stable medium and long-term profitability.
Continue to invest in photovoltaic and wind power projects, and the territory of new energy continues to expand
Since 2014, the company has actively deployed new energy power generation. At present, it mainly invests in the field of photovoltaic and wind power. At present, the company is in operation The total installed capacity of new energy projects under construction (including proposed projects) reaches 4797.78mw (the equity installed capacity is 3817.72mw), and from the investment rhythm since 2014, there is still expected to be expansion in the future. At present, the total installed capacity of the new energy power generation projects arranged by the company has exceeded that of thermal power, and the projects are being put into operation successively. With the implementation of new energy power generation projects, the company’s power generation capacity is expected to continue to rise, the power generation cost is expected to decline, and the new energy power generation is expected to continue to grow The electricity price of power grid is also higher than that of thermal power, the volume and price of power business are expected to rise, and the profitability is expected to continue to improve.
In the past, the company’s new energy projects were mainly concentrated in Inner Mongolia, especially in eastern Mongolia, and Shanxi also had a slight layout. However, recently, the company has actively invested and built projects in Shaanxi, Shandong, Tianjin and Jilin, and gradually developed from a regional company to a national company. On October 26, 2021, the company announced that the company’s name was changed from ” Huolinhe Opencut Coal Industry Corporation Limited Of Inner Mongolia(002128) ” to “power investment energy”, marking the transformation of the company’s future development direction from the original main coal industry to the new energy field, and the company’s gradual transformation from a traditional energy supplier to a comprehensive energy supplier. In the future, the stable cash flow generated by the company’s coal industry will continue to be invested in the construction of new energy power stations.
Investment advice
We expect that the company is expected to realize a net profit of RMB 4.014 billion / RMB 3.989 billion / RMB 4.202 billion attributable to the shareholders of the parent company from 2021 to 2023, with corresponding PE multiples of 7.6x, 7.6x and 7.2x respectively. Considering the company’s active transformation to new energy in recent years, it is expected to obtain a valuation higher than that of pure thermal coal business. Therefore, we believe that the company’s valuation is expected to rebound, cover it for the first time, and give a “recommended” rating.
Risk statement
1) The change of regional market demand may lead to the decline of coal price; 2) The profit of thermal power may decrease due to the liberalization of power market and the risk of cost increase; 3) There are many new energy projects under construction, with the risk of policy change; 4) Electrolytic aluminum prices fell sharply.
