\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 011 Huaneng Power International Inc(600011) )
Event: the company announced the first quarterly report, realizing a revenue of 65.25 billion yuan, a year-on-year increase of 30.54%; The net profit attributable to the parent company was -956 million yuan, a year-on-year decrease of 129.96%; After deduction, it was -1.415 billion yuan, a year-on-year decrease of 148.30%.
The on grid electricity price rose by 19.47%, and the high coal price dragged down the performance. According to the company's announcement, Q1 achieved an income of 65.250 billion yuan, a year-on-year increase of 30.54%; The net profit attributable to the parent company was -956 million yuan, a year-on-year decrease of 129.96%; After deduction, it was -1.415 billion yuan, a year-on-year decrease of 148.30%, in line with market expectations. The total on grid power of Q1's domestic power plants was 107717 billion kwh, a year-on-year increase of 2.42%; The average on grid electricity price was 501.96 yuan / MWh, with a year-on-year increase of 19.47%, and the market-oriented trading electricity was 88.92%. Q1 gross profit margin was 3.66%, up 23.65 percentage points month on month. On April 20, the national Standing Committee proposed to increase coal production capacity by 300 million tons this year through nuclear production, expansion and new production. It is expected that the company's gross profit margin will continue to increase. The company plans to put into operation more than 8GW of green power capacity this year, including 3gw of wind power (1.35gw of offshore wind power) and 5GW of photovoltaic power, which is expected to contribute significant performance increment.
Green power business: high industry prosperity + good competition pattern + strong profitability, with a target market value of 180 billion. 1) Industry level: high prosperity + good competition pattern + strong profitability. Green power operation belongs to a very clear growth stage in the next 5-10 years, which is more suitable for PEG valuation. 2) At the company level, combined with the group's objectives and on-hand reserve projects, we expect the compound growth rate of the company's green power installed capacity to be 40% from 2022 to 2024; Considering that there are some sea breeze projects in the company's new installed capacity, and their profitability is stronger than that of land breeze projects, the compound growth rate of the company's net profit attributable to the parent company should be higher than that of the installed capacity. According to the calculation of 30 times PE given by PEG, the contribution of the new energy installed business to the net profit attributable to the parent company in 2022 is about 6 billion yuan, and the corresponding target market value is 180 billion yuan.
Thermal power business: in the long run, it will eventually be converted into green power assets through depreciation, and the current value is significantly underestimated. 1) In the short term, with the market-oriented transaction price rising and the national development and Reform Commission strictly controlling the coal price, the company's thermal power business has passed the most difficult moment and is expected to achieve breakeven or micro profit. 2) In the medium term, with the introduction of the administrative measures for power auxiliary services, the profitability of auxiliary services of thermal power units is expected to be improved. 3) In the long run, the company's existing thermal power assets will eventually be converted into green power assets in the form of depreciation. At present, the Pb of Huaneng Power International Inc(600011) (a share) and Huaneng Power International Inc(600011) power (H share) are 2.10 and 0.39 respectively, while the Pb of Longyuan Power (a share) and Longyuan Power (H share) are 4.01 and 2.06 respectively. Therefore, the value of the company's existing thermal power assets is obviously underestimated.
Profit forecast and investment rating: we maintain the company's EPS of 0.48, 0.73 and 0.85 yuan and PE of 15, 10 and 8 times respectively from 2022 to 2024, maintaining the "buy" rating.
Risk warning: the hours of wind power photovoltaic power generation do not meet the expectations, and the terminal sales price continues to decline due to the impact of policies
