Power investment energy ( Huolinhe Opencut Coal Industry Corporation Limited Of Inner Mongolia(002128) )
The performance of the first two months of the year made a good start, and the green power transformation accelerated. Maintain “buy” rating
The company released the announcement of operating data. From January to February 2022, the operating revenue was about 4.737 billion yuan, with a year-on-year increase of about 25.79%; The net profit attributable to the parent company was about 1.026 billion yuan, a year-on-year increase of about 80.19%. The company achieved a good start from January to February, or mainly benefited from the rise in coal and aluminum prices. We maintain the profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 3.56/59.9/6.33 billion yuan, a year-on-year increase of 71.9% / 68.1% / 5.8%; EPS is 1.85/3.11/3.30 yuan, corresponding to 8.1/4.8/4.5 times of the current share price PE. The future performance of the company’s main coal and aluminum industry is expected to be released steadily, the installation of new energy has entered the accelerated layout stage, and is optimistic about the transformation and growth potential. Maintain the “buy” rating.
The high price of coal and aluminum is conducive to the release of double main business performance
Coal business: according to the company’s interactive platform information, the company’s coal price was basically flat from January to February 2022, and continued to implement the price in December 2021, up about 30% from the beginning of 2021. The proportion of the company’s long-term association is high, which fully benefits from the upward movement of the benchmark price of the long-term association. According to the recent announcement of the company, the basic price of 2022 long-term coordination follows the level of December 2021, and the annual long-term coordination price adjustment mechanism is changed to: adjust the basic price of the next month in the same proportion every month according to the month on month change rate of NCEI index (previously, it was mainly linked with Bohai Rim thermal coal price index and Jinzhou Port Co.Ltd(600190) coal price index). On March 11, the latest issue of NCEI index was 770 yuan, an increase of 20 yuan over the end of 2021, supporting the high and stable operation of the company’s coal price. At the same time, the company’s coal production and sales volume and ton cost remain stable, and the coal performance may be significantly improved.
Electrolytic aluminum business: since January 2022, the price of electrolytic aluminum has strengthened significantly. From January to February 2022, the average price of A00 aluminum of Changjiang nonferrous metals was 21858 yuan / ton, up 41% year-on-year and about 10% higher than 2021q4. The company’s electrolytic aluminum pricing mechanism is flexible and fully benefits from the high elasticity of aluminum price. On the cost side, since the company provides its own coal power and coal, it can effectively avoid the cost pressure caused by the rise of energy prices; Meanwhile, the decline in alumina prices also eased the pressure on raw material costs. Since the beginning of the year, alumina prices have decreased by about 15% compared with 2021q4. Overall, the company’s electrolytic aluminum business profits benefit at both ends of the price and cost or at the same time.
New energy installation projects continued to be launched, and green power transformation accelerated
According to the company’s announcement in March, the company plans to invest in three new energy projects with a total installed capacity of 1.5gw: Tongliao 1 million kW wind power transmission project, Shanghai Miao Shandong UHV transmission channel Alxa base 400MW wind power project, and Jinzhong Yuci 100MW roof distributed photovoltaic project. According to the previous announcement, the first two have been approved at the end of 2019. Up to now, about 1.55gw of new energy units of the company have been connected to the grid (including 0.4gw electrolytic aluminum self provided units), the installed capacity of approved projects under construction is 2.35gw, and the planned projects to be approved are 2.08gw, totaling 5.98gw. Considering the short construction period of green power installation, the grid connected capacity is expected to increase intensively in 2022. Under the background of double carbon target, at present, it is in a critical period of energy reform, and it is the general trend for traditional energy enterprises to plan transformation. Backed by the state power investment group, a central enterprise leading in the installation of new energy, the company has a clear transformation direction, takes the lead in the layout of green power transformation, and has the advantage of first mover scale, which is expected to form the core competitiveness of high barriers in the medium and long term. Optimistic about the long-term performance power of the company’s green power transformation.
Risk tip: economic growth slows down; Coal and aluminum prices fell more than expected; The utilization rate of new energy units is lower than expected
