\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 985 China National Nuclear Power Co.Ltd(601985) )
Event: the company released the performance forecast for the first quarter of 2022. It is expected that the net profit deducted from non parent company in the first quarter will increase by 1.03-1.22 billion yuan compared with the same period of the previous year (before retroactive restatement), with a year-on-year increase of 57% – 68%; Compared with the same period of last year (after retroactive restatement), it increased by 9351124 million yuan, with a year-on-year increase of 50% – 60%, and the performance growth exceeded expectations again.
Retroactive restatement mainly refers to the implementation of the interpretation of accounting standards for Business Enterprises No. 15 from January 1, 2022, which requires that the revenue and cost related to trial operation sales shall be accounted for separately and included in the current profit and loss. The net amount of the revenue related to trial operation sales after offsetting the relevant costs shall not be used to offset the cost of fixed assets or R & D expenditure. The income and cost related to the commissioning and operation of Fuqing unit 6 in this period are included in the current profit and loss respectively.
The performance of 2022 is worth looking forward to: the company has recently successively released the performance express of 2021, the announcement of business data from January to February 2022 and the performance forecast of the first quarter, with brilliant performance. According to the company’s announcement, the company’s revenue reached 62.367 billion yuan in 2021, a year-on-year increase of 19.3%; The net profit attributable to the parent company was 8.037 billion yuan, a year-on-year increase of 34.05%; In the first quarter of 2022, the net profit deducted from non parent company increased by 57% – 68% year-on-year. The substantial growth of the company’s performance mainly benefits from:
1) the installed capacity of nuclear power and new energy sector increased steadily: in terms of nuclear power, the company benefited from the commissioning of Fuqing No. 5 and Tianwan No. 6 units in the first half of the year. By the end of 2021, the company’s nuclear power installed capacity in operation reached 22.55gw (2.34gw NEW throughout the year). With the commissioning of Fuqing No. 6 unit at the beginning of this year, it will further bring 1.16gw new installed capacity to the company. From January to February 2022, the China National Nuclear Power Co.Ltd(601985) power generation increased significantly. According to the data released by the energy administration, the growth rate of national nuclear power generation reached 9.6% from January to February 2022, and the improvement of power generation became the core driving force of the company’s performance growth. In terms of new energy, by the end of 2021, the company had 8.87gw of installed capacity (3.62gw new throughout the year), including 2.63gw of wind power and 6.24gw of photovoltaic power. It is expected that the company’s new energy will still be put into operation at a high speed in 2022. By the end of 2021, the company is building 1.9gw of new energy installed capacity, including 0.27gw of wind power and 1.65gw of photovoltaic power. In the long run, the company plans to reach 30GW of new energy installed capacity by the end of 2025.
2) the market-oriented electricity price of nuclear power rises: according to the annual trading results of electric power in all provinces in 2022, Jiangsu requires that the annual market-oriented trading electricity of nuclear power should not be less than 20 billion kwh, of which the annual trading electricity should not be less than 16 billion kwh, which has risen by nearly 20% with the coal electricity price; Zhejiang requires that CNNC Qinshan Phase I market-oriented trading electricity account for 50%, and Sanmen Nuclear Power market-oriented trading electricity account for 10%; The electric quantity also rises.
The strong are always strong, and the year of high performance growth is expected to achieve positive feedback: the high performance growth of the company in 2022 comes from the increase of power and electricity price, and the cash flow is more abundant than in previous years, which is expected to form a “positive feedback” effect. Both the investment progress of the scenery project, the decline of financial expenses and the improvement of dividend rate are worth looking forward to. In particular, the scenery project is a heavy asset investment project, with high capital demand and more abundant cash flow, which can accelerate the expansion progress of the company in the field of scenery.
Under the background of unknown situation in Russia and Ukraine and intensified epidemic situation, deterministic growth highlights scarcity: the company’s performance has both growth and certainty. 1) nuclear power has priority dispatching right, and the utilization hours are basically fixed. Except for equipment maintenance, it can basically be fully utilized, and the utilization hours can be as high as 78008000 hours; 2) The cost is basically fixed, the proportion of fuel cost is low, and the cost composition is mainly depreciation; 3) Electricity price without subsidy, low downside risk and excellent cash flow; 4) The depreciation life is lower than the actual service life. As a stable clean power operation enterprise, the company’s performance has increased steadily with the installation and operation of nuclear power, wind power and photovoltaic, which reflects the scarcity under the background of unknown situation outside China.
Investment suggestion: we estimate that the company’s operating revenue from 2022 to 2023 will be 74.352 billion yuan and 78.353 billion yuan respectively, with growth rates of 19.0% and 5.4% respectively, and the net profit attributable to the parent company will be 11.471 billion yuan and 12.608 billion yuan respectively, with growth rates of 43.0% and 9.9% respectively; Maintain the investment rating of Buy-A, and the six-month target price is 10.0 yuan.
Risk tip: the policy promotion is less than expected, the project commissioning progress is less than expected, and the project approval progress is less than expected.
