Core view
One week market review: this week, the CSI 300 index fell 4.22%, the power and utility index fell 3.98%, and the weekly relative yield was 0.25%. In the Shenwan industry category, the increase of public utilities ranked 10th among 28 industries. By sector, the environmental protection sector fell 4.31%; Among the sub sectors of the power sector, thermal power decreased by 4.36%; Hydropower fell by 5.05%, and new energy power generation rose by 0.71%; Water sector fell 1.66%; Gas sector fell 8.05%; Testing services fell 1.16%.
Comments on changes: power sector, coal transformation new energy company Shenyang Jinshan Energy Co.Ltd(600396) (7.87%) increased significantly. Benefiting from the Ministry of housing and urban rural development science and technology development plan issued during the 14th Five Year Plan period and the integrated utilization of efficient and intelligent photovoltaic buildings, Zhejiang Sunoren Solar Technology Co.Ltd(603105) (10.27%) increased significantly, Jilin Electric Power Co.Ltd(000875) (6.58%) rose against the trend, China National Nuclear Power Co.Ltd(601985) (5.41%) maintained high performance growth, and the development environment of benefiting nuclear power outside China improved and the electricity price rose Suwen Electric Energy Technology Co.Ltd(300982) (2.08%) achieved good performance growth, benefiting from the construction of distributed photovoltaic and distribution network, and rose against the trend Zhejiang Tuna Environmental Science & Technology Co.Ltd(603177) (10.31%) reduced losses year-on-year and arranged the “carbon neutralization” business.
China National Nuclear Power Co.Ltd(601985) performance has increased rapidly, and its profitability is prominent compared with offshore wind power and nuclear power China National Nuclear Power Co.Ltd(601985) released the performance express. In 2021, the company achieved a total operating revenue of 62.367 billion yuan (+ 19.3%); The net profit attributable to the parent company was 8.037 billion yuan (+ 34.1%) and maintained a rapid growth. The economy of nuclear power investment is much higher than that of offshore wind power. At present, the safety of the third-generation nuclear power has been greatly improved, the advantages of stability and cleanliness have been highlighted, and technology has continued to progress, which will play a more important role in the construction of new power system. From the comparison results of project calculation, the overall return on capital is expected to reach 11% as the cost of offshore wind power projects decreases. The capital return rate of the third generation nuclear power reactor can reach nearly 16%. As the net profit is greatly affected by financial expenses, depreciation and other factors, on average, the average net profit of nuclear power in 60 years is about 850 million yuan and that of offshore wind power in 25 years is about 400 million yuan.
Investment strategy: Public Utilities: 1. The reform of electricity marketization is promoted, and the electricity price can better reflect the value of supply and demand, cost and environment. The construction cost of new energy continues to decline. New energy operators have “triple” certainty, and the growth rate of “quantity” – scenery installation has high certainty; “Price” – the price of thermal power rises, the green premium is superimposed, and the profit space of green power is opened; “Performance” – this year’s low-cost fans and rush to install sea breeze ensure the performance of next year. 2. The policy promotes the optimal combination of coal and new energy. The policy of Changxie coal price + Changxie electricity price is expected to be implemented, the linkage mechanism is formed, the market-oriented trading of coal and electricity is expanded, and the turning point of thermal power profit appears. 3. The construction of new power system with new energy as the main source will deeply benefit new energy power producers and comprehensive electric energy services. It is recommended to actively transform new energy sources with abundant cash flow, leading thermal power Huaneng Power International Inc(600011) etc; The new energy operation leaders China Three Gorges Renewables (Group) Co.Ltd(600905) , Longyuan Power with capital cost and resource advantages recommend good cash flow, “nuclear power and new energy” two wheel drive China National Nuclear Power Co.Ltd(601985) , and comprehensive power service Suwen Electric Energy Technology Co.Ltd(300982) . Environmental protection industry: 1. High performance and low valuation; 2. The business model is improved, and the operation indicators continue to improve: 3. The stable growth operation attribute appears, and the yield and cash flow indicators continue to improve. Recommend recycled paper as the leading Zhejiang Rongsheng Environmental Protection Paper Joint Stock Co.Ltd(603165) .
Risk warning: the environmental protection policy is not as expected; The growth rate of power consumption decreased; Electricity price reduction; The terminal price of natural gas has been reduced.
