\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 985 China National Nuclear Power Co.Ltd(601985) )
Event: at the executive meeting of the State Council held today, it was pointed out that nuclear power should be developed in an orderly manner under the premise of strict supervision and ensuring absolute safety, and the three new nuclear power unit projects that have been comprehensively evaluated and reviewed and included in the national plan should be approved.
The progress of nuclear power approval was accelerated and a positive signal was released: affected by the Fukushima incident, the approval of China National Nuclear Power Co.Ltd(601985) was stopped in 20162018; Since the restart of nuclear power approval in 2019, China National Nuclear Power Co.Ltd(601985) approval progress has been stable, and a total of 4 units in Zhangzhou phase I and taipingling phase I have been approved in 2019; In 2020, a total of 4 units of Changjiang phase II and Sanao phase I were approved; In 2021, the state further approved Tianwan nuclear power units 7 and 8, xudabao nuclear power units 3 and 4 and Hainan small reactor demonstration project. China’s one-time approval of three nuclear power projects with a total of six units indicates that the progress of nuclear power approval is expected to be further accelerated. The three nuclear power projects approved this time are Sanmen phase II project, Haiyang phase II project and Lufeng nuclear power units 5 and 6, all of which are third-generation nuclear power units. The centralized approval of nuclear power projects sends a positive signal to accelerate the development of nuclear power. The “positive and orderly development of nuclear power” will be fulfilled. During the 14th Five Year Plan period, China is expected to approve 6-8 new nuclear power units every year.
High quality of nuclear power assets, good competition pattern and accelerated examination and approval have highlighted long-term growth: high quality of nuclear power assets has advantages over other power types: 1) high and stable utilization hours, up to 78008000 hours; 2) The cost side is basically fixed, the fuel cost accounts for only about 20%, and the fluctuation is small; 3) The electricity price does not include subsidies, and the downside risk is small; 4) The depreciation life is lower than the actual service life, and the service life of the third generation nuclear power unit can reach 50-80 years. In addition, the competition pattern of the nuclear power industry is good. At present, only China nuclear power, Guangdong nuclear power, China nuclear power and Huaneng have nuclear power qualifications. We believe that the accelerated approval has opened up the long-term growth space of nuclear power, and the valuation level of nuclear power is expected to be improved.
China National Nuclear Power Co.Ltd(601985) as the leader of China National Nuclear Power Co.Ltd(601985) will directly benefit from the accelerated progress of nuclear power approval:
1) benefiting from the steady operation of nuclear power and new energy installation and the improvement of market-oriented electricity price in the short term: with the operation of Fuqing No. 5, Tianwan No. 6 and Fuqing No. 6 in the first half of 2021 and the first quarter of 2022, the company’s nuclear power installation has reached 23.71gw so far; The installed capacity of new energy reached 8.87gw, and the power generation increased significantly under the steady operation of the installed capacity. In the first quarter, the company’s nuclear power and new energy power generation increased by 14.4% and 37.7% respectively year-on-year. At the same time, benefiting from the rise of nuclear power market-oriented electricity prices in Jiangsu, Zhejiang and other places, the company has great potential for performance growth in 2022;
2) the new energy installed capacity will be put into operation rapidly in the medium term. The company plans to reach 30GW of new energy installed capacity by 2025, with an average annual increase of 5GW. The vigorous operation of new energy during the 14th Five Year Plan period is expected to make up for the nuclear power production platform period from 2022 to 2023 and provide support for performance growth;
3) the company has sufficient projects under construction for a long time, with a total of 7 units under construction, of which Zhangzhou units 1 and 2 are expected to be put into operation in 2024 and 2025 respectively, and the remaining units under construction are expected to be put into operation during the Tenth Five Year Plan period. At the same time, benefiting from the accelerated progress of nuclear power approval, the company’s nuclear power units are expected to continue to be put into operation steadily, bringing long-term growth space.
Investment suggestion: we estimate that the company’s revenue from 2021 to 2023 will be 62.475 billion yuan, 74.352 billion yuan and 78.353 billion yuan respectively, with growth rates of 19.5%, 19.0% and 5.4% respectively, and the net profit will be 8.023 billion yuan, 11.471 billion yuan and 12.608 billion yuan respectively, with growth rates of 33.8%, 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 approval progress of future nuclear power projects is less than expected.
