Power investment energy (002128)
Event: on January 6, 2021, the power investment Energy announced that the Energy Bureau of Xilin Gol League agreed to build the 500MW wind power generation project of beligutai of Ximeng Abaga banner of Abaga banner of Xilin Gol League Green Energy New Energy Co., Ltd. The total investment of the project is 2.997 billion yuan, of which 20% is the project capital and the remaining 80% is bank loans.
New energy projects to the next city. 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 installed capacity of the company’s new energy projects in operation and under construction (including proposed projects) has reached 4797.78mw (equity installed capacity 3817.72mw), of which the installed capacity of photovoltaic projects is 1452.72mw, accounting for 38% of the company’s new energy installed capacity (including proposed projects), The installed capacity of wind power projects is 2365mw (equity), accounting for 62%. After the implementation of bailigutai 500MW wind power project in Abaga banner, the installed scale of new energy in the company’s equity increased by 500MW, an increase of 13%.
The transformation of integrated energy suppliers is further. 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.
The main businesses of coal and electrolytic aluminum are expected to provide stable cash flow to support the development of the company’s new energy business. 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. According to the work plan for signing and performing medium and long term coal contracts in 2022 (Exposure Draft) issued by the national development and Reform Commission, 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. In terms of electrolytic aluminum, 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), has its own power plant, has industry-leading profitability and stable medium and long-term profitability. In the future, the stable cash flow generated by the company’s coal and electrolytic aluminum business will continue to be invested in the construction of new energy power stations.
New energy power generation business is expected to become the growth point of future performance. At present, the total installed capacity of the company’s new energy power generation projects 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 is expected to continue to rise, the power generation cost is expected to decline, the on grid price of new energy power generation is also higher than that of thermal power, the power business is expected to rise both in volume and price, and the profitability is expected to continue to improve.
Investment suggestion: Based on the early rebound of coal price, we raised our profit forecast. It is expected that the net profit attributable to the shareholders of the parent company is expected to be RMB 4.014 billion / RMB 4.161 billion / RMB 4.378 billion from 2021 to 2023, and the corresponding PE multiples are 7 times, 7 times and 6 times respectively (based on the share price on January 6, 2022). 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 and maintain the “recommended” rating.
Risk tips: 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.
