\u3000\u30 Shenzhen Capstone Industrial Co.Ltd(000038) 16 Cgn Power Co.Ltd(003816) )
Performance review
The company released its 2021 annual report and the first quarterly report of 2022 on April 8 and April 22, 2022 respectively: the annual revenue and net profit attributable to the parent company in 2021 were 80.68 billion yuan (YoY + 14.3%) and 9.73 billion yuan (YoY + 1.8%) respectively; In 2022q1, the revenue and net profit attributable to the parent company were 17.18 billion yuan (YoY + 0.2%) and 2.85 billion yuan (YoY + 20.1%) respectively. Since August 2021, unit 1 of Taishan nuclear power plant has been shut down for maintenance, affecting the power generation of the whole year and the first quarter of this year.
Business analysis
There will be no new holding installed capacity in 2021, and the utilization hours will increase, resulting in a stable growth of online power. In 2021, the revenue of power sales business was 58.71 billion yuan (year-on-year + 5.8%), accounting for 72.8% (year-on-year -5.9pct). The electricity price was stable, and the growth of revenue was mainly due to the increase of on grid power. Unit 1 of Taishan nuclear power plant has been shut down for maintenance since August, which has reduced the utilization hours of the unit by 16.8% year-on-year in 2021, and the power generation is expected to be reduced by about 4 billion kwh; However, based on the strong demand for electricity in China, the average utilization hours of operating units in the whole year reached 7731 hours, an increase of 422 hours year-on-year, and the on grid power of holding units in the whole year was 163.92 billion kwh, a year-on-year increase of + 5.2%.
The unit price of 2021q1 market-oriented electricity increased, driving the improvement of profitability. In 2021q1, the net profit increased significantly, and the gross profit margin and net profit margin rose to 40.3% (year-on-year + 3.3pct) and 24.8% (year-on-year + 2.6pct) respectively, mainly due to the increase of market trading electricity price and the increase of investment income in Hongyanhe Nuclear power.
Fangchenggang No. 3 is expected to be connected to the grid and contribute new electricity within the year; The increase of market-oriented electricity is expected to increase the selling price of electricity. 1) Considering entrusted management, the company currently has a total of 25 units in operation and 7 units under construction. After all units are put into operation, the total installed capacity will increase by 29.4%. Among them, Fangchenggang No. 3 is expected to be connected to the grid in 2022h2, contributing to the new power. Meanwhile, on April 20, Lufeng 5 and 6 units of its subsidiary Lufeng nuclear power were approved by the State Council, with a single unit capacity of 1200mW, further improving the future installed capacity. 2) The company’s market-oriented electricity consumption accounted for 39.2% in 2021, with a year-on-year increase of + 5.6pct. Under the background of tight power supply and demand, the market-oriented electricity price is expected to increase.
Investment advice
It is estimated that in 2022 / 2023 / 2024, the company’s revenue will be 86.2/94.9/101.3 billion yuan, the net profit attributable to the parent company will be 10.1/113/12.9 billion yuan, the corresponding EPS will be 0.20/0.22/0.26 yuan and the corresponding PE will be 15 / 13 / 11 times respectively, maintaining the “overweight” rating.
Risk tips
The grid connection progress of new units is less than expected; The utilization hours of units in operation are less than expected; The market-oriented electricity price is lower than expected; The increase of nuclear power plant units and the risk of increasing the difficulty of safe operation.
