\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 011 Huaneng Power International Inc(600011) )
Event:
The company released its annual report for 2021. In 2021, the company achieved a revenue of 204.6 billion yuan, a year-on-year increase of 20.75%; The net profit attributable to the parent company was -10.3 billion yuan, a year-on-year decrease of 324.85%.
Comments:
Under the high coal price, the company’s performance changed from profit to loss, with a loss of 10.3 billion yuan in 2021
In 2021, the power demand of the whole society increased rapidly, driving the power generation side to rise sharply year-on-year. The company took measures such as strengthening power supervision and reducing unit standby, and completed 430165 billion kwh of online power in China, an increase of 13.23% year-on-year. In terms of electricity price, affected by national policies and the relationship between supply and demand, the average on grid electricity price of the company in 2021 increased by 4.41% year-on-year to 431.88 yuan / MWh. With both volume and price rising, the company achieved a revenue of 204.6 billion yuan in 2021, a year-on-year increase of 20.75%. On the cost side, 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 power sales of domestic thermal power plants was 316.36 yuan / MWh, a year-on-year increase of 51.32%. Under the high coal price, the cost of the company increased sharply, resulting in the performance from profit to loss, with a loss of 10.3 billion yuan in 2021.
With the increase of electricity price and the regulation of coal price, the profitability of thermal power business is expected to return to a reasonable level
In terms of electricity price, the market-oriented reform of electricity price has been promoted. We expect that the price increase of electricity market-oriented transaction in various provinces in the later stage may continue to be high. From the annual trading results in 2022, the average transaction prices of Jiangsu, Guangdong, Shaanxi and other provinces are higher than the local benchmark coal price. From the cost side, there are frequent policies at the national level. In late February, the national development and Reform Commission issued the notice on further improving the coal market price formation mechanism, which defined three key policies and measures: guiding the coal price to operate within a reasonable range, improving the coal and electricity price transmission mechanism, and improving the coal price regulation mechanism. In the future, with the gradual implementation of policies, the profitability of thermal power business is expected to return to a reasonable level.
Vigorously promote the transformation of energy structure, and the contribution of clean energy to performance is expected to gradually highlight
By the end of 2021, the company’s controllable power generation installed capacity was 118695 MW, with low-carbon clean energy accounting for 22.39%, including 1224262 MW of natural gas, 10535 MW of wind power, Cecep Solar Energy Co.Ltd(000591) 3311.13 MW, 368.10 MW of hydraulic power and 120 MW of biomass. The company vigorously promotes the transformation of energy structure. The capital expenditure plans of Fengguang in 2022 are RMB 12.649 billion and RMB 18.609 billion respectively. The contribution of clean energy to performance is expected to gradually highlight.
Investment suggestions:
Taking into account the company’s business expansion and the changes in coal price and electricity price, it is estimated that the company’s net profit attributable to the parent company from 2022 to 2024 will be RMB 7.5 billion, 10.4 billion and 12.3 billion (the original value from 2022 to 2023 will be RMB 7.6 billion and 8.9 billion), and the corresponding PE will be 15, 11 and 9 times, maintaining the “buy” rating.
Risk tips: the risk of a sharp downturn in the macro economy, a sharp rise in coal prices, a reduction in electricity prices, lower downstream demand than expected, the risk of too fierce industry competition, the risk of continued arrears of subsidies, etc
