\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 642 Shenergy Company Limited(600642) )
Event overview: the company released its 2021 annual report, realizing an operating revenue of 25.313 billion yuan, a year-on-year increase of 28.43%; The net profit attributable to the parent company was 1.642 billion yuan, a year-on-year decrease of 31.36%; The net profit deducted from non parent company was 228 million yuan, a year-on-year decrease of 90.46%. The company plans to distribute a cash dividend of 0.20 yuan per share to all shareholders.
Holding and participating in coal power drag: under the unprecedented high coal price pressure of 2h21, in addition to Ningxia Wuzhong power plant’s substantial loss to negative net assets and provision for impairment of 512 million yuan, the company’s overall gross profit loss of consolidated coal power sector was 18 million yuan, a year-on-year decrease of nearly 1.5 billion yuan; Participation in coal and electricity sector dragged down investment income by more than 500 million yuan, a year-on-year decrease of about 1 billion yuan.
The performance of new energy was in line with expectations, and Haifeng’s bid was lost. The three new energy subsidiaries in Shanghai, Qinghai and Inner Mongolia achieved net profits of 486, 241 and 204 million yuan respectively, totaling 930 million yuan, making a significant contribution to the company’s profits. The projects under construction have been put into operation one after another with abundant cash flow. The company’s “14th five year plan” specifies that the annual average installed capacity of 1.6-2.0gw of wind and light is increased, and the CAGR in five years is about 40%. It is estimated that by 2025, wind and light will account for more than half of the company’s installed capacity and about one third of the power generation. Shanghai Jinshan offshore wind power phase I 300MW project, which the company participated in the bidding recently, failed to win the bid, but was successfully allocated to Hainan Danzhou cz2 offshore wind power 1200mW project (demonstration project, not participating in the bidding).
Excellent asset structure and relatively controllable risk: different from other thermal power enterprises whose performance fluctuates greatly affected by coal price, the thermal power sector of the company operates steadily. Because the coal consumption is far lower than the industry average, the coal power sector can ensure profitability even in the period of relatively high coal prices. Although there is a loss in extreme cases in 2021, the situation is still better than that of most peers. In addition, the capacity, electricity price and gas source of the two-part system are self-sufficient, so as to ensure that the income and cost are controllable, and the company’s gas and electricity sector can maintain its income in drought and flood; The coal, gas, water, nuclear and wind power generation enterprises and other financial assets with equity participation realize an average annual investment income of about 1.4 billion yuan, accounting for more than 40% of the operating profit, and the volatility is small.
Investment suggestion: affected by the impairment of Wuzhong thermal power and the significant losses of holding and participating in coal power, the company’s performance declined in 2021, but it is still better than most thermal power peers. The 14th five year plan is clear, the management is adjusted in place, put down the burden and go to the battle with light weight, which can better promote the dual carbon goal. Maintain the EPS forecast value of 0.70/0.73 yuan in 22 / 23 years, and add the EPS forecast value of 0.80 yuan in 24 years, corresponding to the closing price PE on April 8, which are 8.7/8.3/7.6 times respectively. Recently, the thermal power sector has continued to adjust, giving the company 10 times PE in 2022, the target price of 7.00 yuan, and maintaining the “recommended” rating.
Risk tips: 1) macroeconomic pressure reduces power demand; 2) Rising fuel prices increase operating costs; 3) Electricity market competition reduces the on grid price; 4) Adjust the supply structure and suppress the output of the unit.
