\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 995 Yunnan Wenshan Electric Power Co.Ltd(600995) )
It is planned to inject peak shaving and frequency modulation assets of China Southern Power Grid to create a high-quality energy storage platform
On September 27, 2021, Yunnan Wenshan Electric Power Co.Ltd(600995) announced the major asset restructuring plan, which plans to replace the equivalent part of 100% equity of the target peak shaving and frequency modulation power generation Co., Ltd. held by the counterparty China Southern Power Grid in the form of major asset replacement, share issuance, purchase and raising supporting funds. After the reorganization, the company’s business has changed from power purchase and sale, power generation, power design and distribution to pumped storage, peak shaving hydropower and independent side energy storage of power grid. In 2020, the peak shaving and frequency modulation company achieved an operating revenue of 5.299 billion yuan, an increase of 9.5% year-on-year; The net profit attributable to the parent company was 844 million yuan, an increase of 2.5% year-on-year. In the first half of 2021, the operating income was 3.117 billion yuan and the net profit attributable to the parent company was 555 million yuan.
Installed capacity growth + stable income, pumped storage is expected to open a golden decade of development
By the end of 2020, the installed capacity of pumped storage power stations in China has reached 31.49gw, accounting for nearly 90% of China’s energy storage market. In terms of electricity price, No. 633 civilization confirmed the guidance of the capacity electricity charge of pumped storage power station to the end-user electricity price. During the operation period, the internal rate of return of capital is verified at 6.5%, and the electricity price when there is electricity in stock is settled according to the spot market price and rules. In terms of installed capacity, the medium and long term development plan for pumped storage (20212035) proposes that the total scale of pumped storage put into operation will reach more than 62 million KW by 2025, about 120 million KW by 2030, and the compound growth rate from 2020 to 2030 will reach 14.3%. At present, the installed capacity of peak shaving and frequency modulation company’s pumping and storage power station is 7.88 million KW, and the South grid is expected to add 6 million kw of pumping and storage capacity during the 14th five year plan. It is estimated that from 2021 to 2026, the pumped storage power station assets of peak shaving and frequency modulation company can realize profits of RMB 552 / 7.66 / 13.77/15.36/20.04 and RMB 2.293 billion, with a compound growth rate of 33%.
New energy storage has broad development prospects and sufficient technical reserves
From 2014 to 2020, the installed capacity of electrochemical energy storage in China increased from 0.13gw to 3.27gw, with a compound growth rate of 71.25%. The implementation plan for the development of new energy storage in the 14th five year plan specifies that the cost of electrochemical energy storage system will be reduced by more than 30% in 2025; At the income side, it is proposed to establish the capacity electricity price mechanism of independent energy storage power station on the grid side. Peak shaving and frequency modulation company built 10MW Shenzhen Baoqing battery energy storage station in 2011, with sufficient technical reserves. China Southern Power Grid plans to promote new energy supporting energy storage of 20GW during the 14th Five Year Plan period, and the installed capacity of energy storage at the grid side is expected to reach 5GW by 2025. The income model is gradually clear, and the downward superposition of costs will further drive the enthusiasm for the construction of new energy storage, and the growth rate of new energy storage installed capacity is expected to increase rapidly. We predict that from 2021 to 2025, electrochemical energy storage assets will realize profits of 0.02/0.76/3.71/7.22 and 1.173 billion yuan, with a compound growth rate of 371.2%.
Investment suggestion: if asset restructuring is not considered, we expect that the company’s original business will realize an operating revenue of RMB 2.165/2.421/2.707 billion from 2021 to 2023, with a year-on-year increase of 15.05% / 11.83% / 11.83% respectively; The net profit attributable to the parent company is RMB 16 / 102 / 161 million, with a year-on-year increase of – 85.87% / 553.23% / 57.88% respectively. If the asset restructuring is successfully completed, the corresponding target price is 23.64 yuan under 25 times PE based on the performance of 2.15 billion yuan in 2023.
Risk tips: the asset restructuring is suspended, suspended or cancelled, macroeconomic risks, risks related to the project establishment of pumping and storage power station, uncertainty risks caused by the implementation of relevant policies, the construction of power spot market and the less than expected growth of new energy storage scale
