\u3000\u3 Shengda Resources Co.Ltd(000603) 693 Jiangsu New Energy Development Co.Ltd(603693) )
In 2021, the profit was 307 million yuan, and the excess profit of wind power hedged the loss of biomass. In 2021, the company realized a revenue of 1.857 billion yuan (+ 20.04%), a net profit attributable to the parent company of 307 million yuan (+ 99.59%), and a net profit not attributable to the parent company of 299 million yuan (+ 103.82%). In 2021, the gross profit margin of the company was 49.10% (+ 9.19pct), and the net profit margin was 19.64% (+ 8.58pct). Thanks to the good wind resources in 2021, the company’s wind power and photovoltaic sectors achieved a total revenue of 1.486 billion yuan (+ 49.26%), and the gross profit margin of the sector was 65.98% (+ 7.14 PCT). If the loss of biomass, steam and water supply business and the provision for asset impairment are excluded, the adjusted net profit attributable to the parent company for the whole year is about 536 million yuan according to the comprehensive income tax rate of 20.7%.
Biomass power generation is planned to be shut down and the business structure continues to be optimized. In 2021, the cost of biomass fuel was high, and the gross profit level of biomass, steam and water supply sector of the company lost 70 million yuan. Since the national green card trading policy under the quota system has not been issued, and the continued operation of biomass power generation projects after the end of electricity price subsidies is no longer of economic value, the company has made an impairment provision of 218 million yuan for biomass power generation assets. After this provision, the income and cost generated by each project will not be included in the consolidated statements. In order to optimize asset allocation and reduce operating losses, the company plans to shut down all biomass power generation projects after the reasonable utilization hours are used up in 20222023. In the future, the company’s performance mainly comes from wind power and photovoltaic power generation, and the performance is more deterministic.
The installed capacity grew rapidly, benefiting from the high premium of green power trading in the East. In 2021, the company newly put into operation Rudong h2350mw sea breeze project and the group injected Datang Binhai 302mw sea breeze project. At the end of 2021, the company’s cumulative holding installed capacity was 1.55gw and equity installed capacity was 1.31gw. The company is the only new energy operation platform under Jiangsu Guoxin Corp.Ltd(002608) group. During the “14th five year plan” period, the company will undertake the key task of double carbon transformation of the group. It is expected that by the end of 2025, compared with the end of 2020, the company will increase the total new energy investment capacity by 7.56gw, and the total installed capacity will reach 8.76gw, with a cumulative increase of 626% and a compound annual growth rate of 49%, making it one of the new energy power generation enterprises with the fastest installed growth rate in China during the 14th Five Year Plan period. In the future, the parity projects within and outside the province developed by the company will directly participate in the green power transaction in Jiangsu province or indirectly participate in the green power transaction in Jiangsu Province through the UHV transmission channel to obtain a high premium and enhance the profitability.
Risk tip: the seasonal fluctuation of scenery resources leads to lower performance than expected; The construction progress of the project is not up to expectations; The loss reduction progress of biomass power generation sector did not meet expectations.
Investment suggestion: considering the significant year-on-year decrease of wind power utilization hours in Jiangsu in the first quarter of 2022 and the continuous increase of biofuel costs, the profit forecast is lowered. It is estimated that the net profit attributable to the parent company in 20222024 will be RMB 700 / 876 / 1354 million (the original forecast was RMB 843 / 973 / 1386 million), with a growth rate of 128.1% / 25.2% / 54.5%, diluted EPS of RMB 1.02/1.28/1.97, corresponding to 16.6/13.3/8.6 times of dynamic PE in 20222024, maintaining the “buy” rating.
