\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 886 Sdic Power Holdings Co.Ltd(600886) )
Event overview: on April 28, the company released its 2021 annual report. During the reporting period, the company realized an operating revenue of 43.682 billion yuan, a year-on-year increase of 11.1%; The net profit attributable to shareholders of listed companies was 2.437 billion yuan, a year-on-year decrease of 55.8%; Non net profit attributable to shareholders of listed companies was RMB 2.171 billion, a year-on-year decrease of 54.5%. The company plans to distribute a cash dividend of RMB 0.1635 per share to all shareholders. The company released the first quarter report of 2022. During the reporting period, the operating revenue was RMB 11.042 billion, with a year-on-year increase of 20.1%; The net profit attributable to shareholders of listed companies was 1.038 billion yuan, a year-on-year decrease of 14.9%; The deducted non net profit attributable to shareholders of listed companies was 990 million yuan, a year-on-year decrease of 10.9%.
Thermal power assets drag: in 2021, the company controlled five coal power enterprises with a total loss of 2.421 billion yuan, a year-on-year decrease of 3.909 billion yuan; The investment income of participating in coal power was – 341 million yuan, down more than 500 million yuan. Considering the trend of coal price, the decline of Q1 profit may also be caused by the drag on thermal power assets.
After Liangyang was put into operation, the Yalong River is ready to go: under the situation of national “power shortage” in 2021, Lianghekou and Yangfanggou accelerated their production, and the hydropower generation of 4q21 company increased by 18.5% year-on-year, of which the growth rate of Yalong River reached 26.3%. The power generation of Yalong River in 1q22 increased by 10.5% year-on-year, but the power generation of Liangyang and Yangyang in a single quarter was significantly lower than that of 4q21, which was similar to that of Tongzilin with an installed capacity of only Shanghai Pudong Development Bank Co.Ltd(600000) kW, or stored for the power generation in flood season.
The 14th five year plan clearly stipulates that more than 11gw of clean energy will be added in the next four years: the company’s 14th five year plan development goal proposes that the holding installed capacity will reach 50 million KW by 2025, of which the installed capacity of clean energy accounts for about 72%, that is, 36 million KW. Considering the commissioning progress of hydropower stations under construction, the installed capacity of non-aqueous clean energy such as wind and light will reach 14.72 million kW in 2025, an increase of 11.15 million KW compared with 3.57 million KW at the end of 2021, with an average annual increase of about 3gw and a CAGR of 42% in four years. With the commissioning of Lianghekou unit 1 on March 18, 2022, the Lianghekou Yangzi project, which has cost more than 60 billion yuan, is nearing the end, and the high capital expenditure has temporarily come to an end. Before the large-scale construction of Ka, Meng, Ya and Leng, the cash flow generated by a hydropower “money printer” is expected to provide sufficient financial support for the accelerated development of the company’s new energy.
Investment suggestion: the flood season is about to begin, and the Yalong River with two new power stations is ready to go; The 14th five year plan has made it clear that the development of the company in the new energy sector will enter the fast lane. According to the prediction and adjustment of electricity, electricity price and coal price, the company’s profit forecast is expected to be 0.85/0.93 yuan (the previous value is 0.94/0.97 yuan) in 22 / 23 years and 1.02 yuan in 24 years. The corresponding closing price PE on April 28 is 11.2/10.2/9.3 times respectively. With reference to the company’s historical valuation and the valuation level of comparable companies in the same industry, the company is given a PE of 12 times in 22 years and the target price is 10.20 yuan / share, maintaining the rating of “prudent recommendation” for the company.
Risk tips: 1) decrease in utilization hours; 2) Reduction of on grid electricity price; 3) Rising coal prices; 4) The inflow of water from the basin is reduced.
