\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 011 Huaneng Power International Inc(600011) )
Key investment points
Event: the company released its annual report for 2021. In 2021, the company achieved an operating revenue of 204605 billion yuan, a year-on-year increase of 20.75%; The net profit attributable to the parent company was RMB 328.54 billion, a year-on-year decrease of -10.24%; The net profit deducted from non parent company was -12.558 billion yuan, a year-on-year decrease of 385.57%. In the fourth quarter of 2021, the net profit attributable to the parent company was -11.047 billion yuan, and the net profit deducted from non attributable to the parent company was -12.77 billion yuan. The range of performance loss increased significantly.
Comments:
The rise in coal prices caused a substantial loss in the company’s performance. Since the second half of 2021, coal prices have risen significantly, resulting in a significant increase in the company’s fuel costs. According to the company’s announcement, in 2021, the company’s comprehensive purchase price of raw coal was 770.67 yuan / ton, a year-on-year increase of 60.85%, and the unit fuel cost of domestic thermal power plants was 316.36 yuan / MWh, a year-on-year increase of 51.32%. The rise in coal price increased the fuel cost of power sales in China by 52.532 billion yuan year-on-year, and the overall cost of thermal power business was 188039 billion yuan, a year-on-year increase of 47.95%, and the gross profit was – 10.86 billion yuan. In addition, in 2021, the company’s consolidation layer needs to calculate and calculate asset impairment loss and credit impairment loss totaling 193 million yuan, mainly for the company’s plan to withdraw asset impairment loss of 55 million yuan for 30% property rights of Huangtai unit 8 held by Huaneng Shandong company, and withdraw credit impairment loss of 110 million yuan for long-term receivables of Huangtai unit 8. The withdrawal of asset impairment loss and credit impairment loss also increases the company’s performance loss to a certain extent.
With the fall of coal price and the rise of electricity price, the profit of the company’s thermal power business can be repaired. Since the fourth quarter of 2021, the state has adopted the coal supply guarantee policy and regulated the coal price. On February 24, 2022, the national development and Reform Commission issued the notice on further improving the coal market price formation mechanism, which defined the reasonable range of medium and long-term contract price of 570770 yuan / ton, and said that it would use the price law to regulate the coal market price and promote the return of coal price to a reasonable range. Recently, the national development and Reform Commission has carried out special verification on the signing and performance of medium and long-term coal contracts to ensure the effective implementation of the long-term coal association and further ensure that the coal price will fall to a reasonable range in the future. In terms of coal supply, China’s advanced coal production capacity continues to release, and Indonesia’s export supply returns to normal. It is expected that the supply capacity of the power coal market will improve in the future, and the supply and demand pattern will be significantly improved compared with 2021. In addition, the rise of market-oriented trading price of coal and electricity will also help to ease the pressure caused by the rise of fuel costs and promote the company’s thermal power business to achieve profitable repair. According to the company’s announcement, in 2021, the average settlement electricity price including tax of the company’s domestic power plants was 431.88 yuan / MWh, an increase of 4.41% over the same period last year. It is expected that the company’s coal power market-oriented electricity price will maintain an upward trend in 2022, helping the company’s thermal power business profit growth.
The installed capacity of Fengguang new energy increased significantly, and the transformation of new energy accelerated. According to the company’s announcement, in 2021, the company’s new wind power and photovoltaic installed capacity were 2.40 GW and 0.80gw respectively. As of 2021, the company’s cumulative wind new energy installed capacity was 13.85gw, a year-on-year increase of 30.05% compared with 10.65gw in 2020, of which the installed capacity of wind power and photovoltaic was 10.54 (including 2.01gw of offshore wind power) and 3.31gw respectively. With the rapid growth of the installed capacity of Fengguang new energy, the company’s power generation and revenue of Fengguang new energy have increased significantly. According to the company’s announcement, in 2021, the company’s wind power and photovoltaic power generation were 20.834 billion kWh and 3.582 billion kwh respectively, with a year-on-year increase of 47.72% and 49.77% respectively. The revenue of wind power and photovoltaic was 10.166 billion yuan and 1.987 billion yuan respectively, with a year-on-year increase of 52.32% and 27.07% respectively. During the “14th five year plan” period, the company will accelerate the installation and operation of Fengguang new energy and bring new performance driving force to the company. In 2022, the company’s capital expenditure on wind power and Cecep Solar Energy Co.Ltd(000591) was 12.649 billion yuan and 18.609 billion yuan respectively, with a total of 31.255 billion yuan, a year-on-year increase of 14.47%. In addition, as of 2021, the amount of projects under construction of the company is 47.414 billion yuan. The projects under construction include a number of scenery new energy projects. It is expected that many projects are expected to be connected to the grid in the first half of 2022, promoting the accelerated development of the company’s scenery new energy business.
Maintain the “buy” rating: the company’s thermal power business is expected to usher in repair, while the company’s Fengguang new energy power generation business continues to promote rapidly. It is expected that the company’s future performance is expected to usher in repair and achieve rapid growth. Referring to the utilization hours of the company’s power generation in 2021, considering the current supply and demand of the power market, the market-oriented transaction price of the company’s thermal power is expected to rise, and the certainty of the decline of coal price is enhanced, we have adjusted the company’s revenue and performance. It is estimated that the operating revenue of the company from 2022 to 2024 will be 247071, 274149 and 282941 billion yuan respectively (208188 and 215196 billion yuan respectively from 2022 to 2023 before adjustment), with a year-on-year increase of 10.96%, 3.21% and 3.36% respectively; The net profit attributable to the parent company was 8.55 billion yuan, 11.142 billion yuan and 13.691 billion yuan respectively (8.025 billion yuan and 10.786 billion yuan respectively from 2022 to 2023 before adjustment), with a year-on-year increase of 183.30%, 30.31% and 22.88% respectively, corresponding to EPS of 0.54, 0.71 and 0.81 yuan respectively, and PE of 15.13, 11.61 and 9.45 times respectively.
Risk tip: there are risks of rising coal prices, falling electricity prices, and the installed growth rate of new energy such as Fengguang is lower than expected. There may be risks of information lag or untimely update of the public data used in the research report.
