\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 900 China Yangtze Power Co.Ltd(600900) )
Event overview: on April 29, the company released its 2021 annual report. During the reporting period, the company realized an operating revenue of 55.646 billion yuan, a year-on-year decrease of 3.70%; The net profit attributable to shareholders of listed companies was 26.273 billion yuan, a year-on-year decrease of 0.09%; Non net profit attributable to shareholders of listed companies was 24.141 billion yuan, a year-on-year decrease of 7.77%. The company plans to distribute a cash dividend of RMB 0.8153 per share to all shareholders. The company released the first quarter report of 2022, and achieved an operating revenue of 9.738 billion yuan during the reporting period, with a year-on-year increase of 9.78%; The net profit attributable to shareholders of listed companies was 3.137 billion yuan, a year-on-year increase of 9.34%; The deduction of non net profit attributable to shareholders of listed companies was 30.97 yuan, with a year-on-year increase of 29.91%.
The improvement of incoming water meets the expectation, and the profit of existing assets is repaired: the incoming water in 2020 and 2021 is dry for two consecutive years, the improvement of incoming water in 2022 meets the expectation, the improvement of incoming water in 1q22 promotes the year-on-year growth of single quarter power generation by 7.9%, and the output of four existing power stations is expected to be repaired. After Baihetan Hydropower Station is fully put into operation, upgrading from “four reservoir joint commissioning” to “six reservoir joint commissioning” can bring considerable water-saving and additional power generation to the downstream. It is estimated that the annual power generation will reach about 230 billion kWh (excluding Chilean LDS). With the contribution of LDs, investment income and other segments, the annual revenue, gross profit and net profit of existing assets are expected to be about 610, 380 and 30 billion yuan.
The injection and start-up of the two power stations in Uzbekistan and Belarus, and the third step is imminent: 1q22 the total power generation of Ukraine and Belarus is nearly 13 billion kwh. After the completion of the injection, the company’s installed capacity of China hydropower will increase by 57.6% to 71.7 million KW, and the average annual power generation is expected to increase from 200 billion kwh to more than 300 billion kwh. The calculation shows that after Ukraine and Belarus enter the stable production period, the annual revenue of Yunchuan hydropower is about 26 billion yuan, the gross profit is about 14.3 billion yuan and the gross profit margin is about 55%.
With the help of three factors, the development of new energy is expected to exceed expectations: “3060” double carbon target promotes the company to intervene in the development of new energy; The business model of wind and light operation is similar to that of hydropower, and the roe is higher than the return on investment of holding equity in peer companies at present; After entering the era of parity, the value of wind and light assets that are no longer subject to subsidy arrears has been revalued, the investment attraction has been improved, and the company’s strong cash flow supports its rapid development in this field. According to the calculation, the company’s installed capacity of wind and light will reach 18-50gw by 2025. Combined with the new energy planning objectives of the group and its brother units, it is feasible for the company to achieve an installed capacity of 20-30gw in 2025. By the end of the first quarter, the 10 photovoltaic power stations that have been put into operation by the subsidiary Changdian new energy have generated more than 110 million kwh in a single quarter, and 4.3gw of new energy resources with coordinate points have been newly obtained. The pre feasibility study of Zhangye pumping and storage project in Gansu Province has been completed.
Investment suggestion: the improvement of 1q22 incoming water is in line with expectations, and the annual performance of existing assets is expected to be repaired. The company will form a “4 + 2 + n” business structure after completing the injection of Ukraine and Belarus power stations and starting the large-scale development of new energy. According to the profit forecast of the company based on the pre judgment and adjustment of electricity quantity and electricity price, the EPS in 22 / 23 years is expected to be 1.33/1.37 yuan respectively (the previous value is 1.31/1.35 yuan), and the EPS forecast value in 24 years is 1.42 yuan, corresponding to the closing price PE on April 29, which is 17.0/16.5/16.0 times respectively. Considering that the asset restructuring plan has not been determined, the existing assets are given 20 times PE for 22 years, the target price is 26.60 yuan / share, and the “recommended” rating of the company is maintained.
Risk tips: 1) the water from the basin is dry; 2) Declining demand suppresses electricity consumption; 3) Fluctuation of market transaction price; 4) Fiscal and tax policy adjustments.
