\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 985 China National Nuclear Power Co.Ltd(601985) )
Event overview: on April 27, the company released its 2021 annual report. During the reporting period, the company realized an operating revenue of 62.367 billion yuan, a year-on-year increase of 19.30%; The net profit attributable to shareholders of listed companies was 8.038 billion yuan, a year-on-year increase of 34.07%; Non net profit attributable to shareholders of listed companies was 7.835 billion yuan, a year-on-year increase of 32.85%. The company plans to distribute a cash dividend of 0.15 yuan per share to all shareholders. The company released the first quarter report of 2022. During the reporting period, the operating revenue was RMB 17.099 billion, with a year-on-year increase of 22.78% (restated); The net profit attributable to the shareholders of the listed company was 2.884 billion yuan, a year-on-year increase of 53.25% (restated); The deducted non net profit attributable to shareholders of listed companies was 2.884 billion yuan, with a year-on-year increase of 52.70% (restated).
The off-season of nuclear power is not light, and the price increase is implemented: due to the influence of factors such as the Spring Festival holiday and making way for heating, Q1 is usually the low point of nuclear power output, but thanks to the incremental contribution of new units and the adjustment of maintenance arrangements, the nuclear power generation capacity of 1q22 company reached 44.340 billion kwh, a year-on-year increase of 14.4% and a month on month increase of 0.9% compared with 4q22. The adjustment of market electricity price in Jiangsu, Zhejiang and other regions where units are located has promoted the substantial growth of revenue and profit.
Despite the adverse factors such as the sharp rise in the cost of photovoltaic in 2021, the company still increased the installed capacity of wind and light by 3.62gw (the caliber before Huineng’s consolidation). By the end of 2021, the total installed capacity of wind and light under construction and to be built by the company has exceeded 8GW, which is expected to accelerate in 2022.
Expected new units, unexpected AP1000: on April 14, 2021, the national Standing Committee approved a total of five new units, all of which are controlled by the company; On April 20, 2022, the national Standing Committee approved 6 units, of which 2 are controlled by the company. The new unit is not unexpected. Unexpectedly, the company has been approved to use cap1000 reactor type (localization version of Westinghouse third generation nuclear power technology AP1000) Sanmen phase II units 3 and 4. After the world’s first AP1000 reactor Sanmen 1 was put into operation in 2018 and another three demonstration units were put into operation, Sino US relations deteriorated rapidly, and it was always difficult to make progress in the follow-up projects of this reactor type, including Xu Dabao, Sanmen, Lufeng and other projects originally planned to adopt AP1000. After the approval was delayed, the plan was also adjusted in the past two years, and the reactor type route selection of domestic third-generation nuclear power hpr1000 (Hualong 1) as the follow-up project was promoted again. The approved release can avoid wasting a large amount of funds invested in preliminary preparations. By the end of 2021, 10.6 billion yuan had been invested in Sanmen phase II, and 11 billion yuan had been invested in xudabao phase I, which also adopts cap1000 stack type.
Investment suggestion: the “Resurrection” of AP1000 stock project can avoid the potential asset impairment loss of the company, and new energy is expected to accelerate after the dormancy in 2021. According to the prediction and adjustment of electricity quantity and electricity price, the company’s profit forecast is expected to be 0.59/0.64 yuan (the previous value is 0.50/0.49 yuan) in 22 / 23 years and 0.66 yuan in 24 years. The corresponding closing price PE on April 27 is 12.2/11.2/10.9 times respectively. With reference to the company’s historical valuation and the valuation level of comparable companies in the same industry, the company was given a PE of 15 times in 22 years, with a target price of 8.85 yuan / share, and maintained the “recommended” rating of the company.
Risk warning: 1) nuclear safety accident; 2) Policy changes; 3) New technology is blocked; 4) Electricity price adjustment; 5) Exchange losses.
