Shenergy Company Limited(600642) (600642)
With accumulation, the scenery has entered the fast lane
The company is the first group of power enterprises to enter the development of new energy in China. In 2020, wind and light account for about 20% of the holding installed capacity and about 10% of the power generation. With the expansion of installed capacity and the decline of coal and electricity sector, the contribution of new energy to profits has been pivotal. The company’s projects under construction have been put into operation one after another with abundant cash flow. The “14th five year plan” clearly stipulates that 1.6-2.0gw of wind and light installed capacity will be added every year. It is estimated that by 2025, wind and light will account for more than half of the installed capacity and about one third of the power generation.
Deep internal force and excellent thermal power operation capacity
Different from other thermal power enterprises whose performance fluctuates greatly affected by coal price, the thermal power sector of the company operates steadily. Because the coal consumption is far lower than the industry average, the coal power sector can ensure profitability even in the period of relatively high coal prices; The capacity, electricity price and gas source of the two-part system are self-sufficient to ensure that the income and cost are controllable, and the revenue of the gas and electricity sector is guaranteed in drought and flood. Through the comparative analysis with the parameters of Pingshan phase I, the profit level under the normalization of Pingshan phase II should be safe.
Investment and invested
The company shares in various power generation enterprises of coal, gas, water, nuclear and wind, with an average annual investment income of about 1.4 billion yuan, accounting for more than 40% of the operating profit and low volatility. Steady operating performance and reasonable dividend return attract the benchmark China Yangtze Power Co.Ltd(600900) of the same industry to continue to increase its holdings.
Focus on the future and dare to be the first
The company has piloted “light storage” operation as early as 2018 and completed the “fire storage” transformation of waisan power plant in 2020. Energy storage, CCUs and hydrogen energy are expected to become the future development direction of the company, with forward-looking layout and dare to be the first.
Investment advice
It is estimated that the company’s EPS in years 21, 22 and 23 will be 0.49/0.70/0.73 yuan / share respectively, corresponding to 15.8/11.1/10.5 times of the closing price of PE on December 24. Through the three methods of relative valuation, absolute valuation and segment valuation, the reasonable stock price range of the company is 9.47-10.90 yuan / share, corresponding to 13.5-15.6 times of PE in 2022. Considering that the diversified power assets controlled and participated by the company are reasonably distributed and have rich profits, and the growth momentum of new energy is good, and the valuation level is lower than that of the same industry, the company is given 15 times PE in 2022, corresponding to the target price of 10.50 yuan, which is raised to the “recommended” rating.
Risk statement
1. Macroeconomic pressure reduces power demand; 2. Rising fuel prices increase operating costs; 3. Electricity market competition reduces the on grid price; 4. Adjust the supply structure and press the output of the unit.
