\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 985 China National Nuclear Power Co.Ltd(601985) )
Key investment points
Recommendation logic: 1) backed by CNNC group, the group has complete industrial chain advantages to support the company’s business development in an all-round way; 2) The company’s nuclear power business volume has increased steadily. It is expected that the installed capacity of nuclear power will reach 26.1gw in 2025, and the proportion of market-oriented electricity will rapidly increase to 37.1%. It has multiple barriers of technology, capital and license; 3) The installed capacity of the company’s new energy in the 14th five year plan has increased rapidly, with cagr42% ranking in the forefront of the industry. It has strong resource acquisition ability, sufficient capital and only 3.2% financing cost, which fully supports the expansion of new energy projects.
Backed by CNNC group, nuclear power + scenery two wheel drive China National Nuclear Power Co.Ltd(601985) is a world-class nuclear power company and the largest shareholder of the company. China nuclear industry group is the only enterprise in China with a complete nuclear science and technology industrial system, which can support the coordinated development of the company’s business in an all-round way. At present, the company has opened the chapter of nuclear power and scenery. At present, the power generation is still dominated by nuclear power, but the scenery is growing rapidly. From 2016 to 2021, the company’s revenue increased from 30 billion yuan to 62.4 billion yuan, with a CAGR of 15.8%, and the net profit attributable to the parent company increased from 4.49 billion yuan to 8.04 billion yuan, with a CAGR of 12.3%.
The steady price increase of nuclear power promotes performance, and license & Technology jointly build high barriers. The company’s nuclear power units have been put into operation stably. By the end of 2021, the installed capacity of nuclear power is 22.5GW. It is expected that the installed capacity of nuclear power will reach 26.1gw in 2025, and the power generation will increase steadily. The average utilization hours of units have rapidly increased to 7871 hours, the operation index is the world’s leading, and the average capacity factor will reach 94% in 2020. In addition, benefiting from the marketization of coal electricity price, the price of nuclear power has increased. The market-oriented proportion of the company’s nuclear power is also further improving. From 2016 to 2020, the proportion of the company’s market-oriented transactions increased rapidly from 9.0% to 37.1%. Focusing on scientific and technological innovation, the company has entered the third generation nuclear power in an all-round way, continuously increased R & D investment, and promoted the construction of small reactor “Linglong No. 1”, highlighting its strategic layout advantages. The nuclear power industry has multiple barriers such as technology, capital and photography, showing a duopoly pattern, with the company accounting for about 43% of the market share.
The installed capacity of new energy increased rapidly, and sufficient funds supported business development. In 2021, the company added 3.6gw of wind power installed capacity, exceeding the expected growth rate. According to the 14th five year plan, the installed capacity of the company’s scenery project is expected to reach 30GW by the end of 2025, with a CAGR of 42%, and the scenery business will grow by leaps and bounds. Relying on the advantages of the whole industrial chain of the group, the company has strong ability to obtain resources. At the end of 2021q3, the company had 16.1 billion yuan of monetary capital, abundant funds, and 14.8 billion yuan of accounts receivable. The financing cost was 3.18% in 2020. The financing cost advantage was obvious, which fully supported the expansion of new energy projects.
Profit forecast and investment suggestions. It is estimated that the compound growth rate of the company’s net profit attributable to the parent company from 2021 to 2023 will be 25.5%. Considering the steady increase in the volume and price of the company’s nuclear power business and the rapid expansion of new energy business, the company’s nuclear power and new energy business will be given 16 / 20 times PE in 2022, the target price is 9.28 yuan, and the “buy” rating will be given for the first time.
Risk warning: the increase of electricity price is less than expected, and the project construction is less than expected.
