\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 886 Sdic Power Holdings Co.Ltd(600886) )
Event:
Sdic Power Holdings Co.Ltd(600886) release 2021 annual report and 2022 quarterly report:
1) in 2021, the operating revenue reached 43.682 billion yuan, with a year-on-year increase of 11.09%; The net profit attributable to the parent company was 2.437 billion yuan, a year-on-year decrease of 55.82%.
2) Q1 in 2022: the operating revenue reached 11.042 billion yuan, with a year-on-year increase of 20.10%; The net profit attributable to the parent company was 1.038 billion yuan, a year-on-year decrease of 14.91%.
Key investment points:
High coal prices suppress performance, and the continuous growth of on grid electricity prices drives the repair of profits. In 2021, the company achieved an operating revenue of 43.682 billion yuan, an increase of 11.09% year-on-year, thanks to the simultaneous rise of power business volume and price. In 2021, the company’s newly put into operation / acquired installed capacity was 4.423 million KW, including 4.015 million kw of hydropower, 98000 kW of wind power, 310000 kW of photovoltaic, and 149633 million kwh of on grid power, an increase of 3.45% year-on-year; The on grid price was 0.319 yuan / kWh, with a year-on-year increase of 5.98%. However, high coal prices suppressed performance, resulting in a year-on-year increase of 42.54% in operating costs and a year-on-year decrease of 55.82% in net profit in 2021. In the first quarter of 2022, the company’s power generation increased slightly by 1% compared with the same period last year, and the average on grid electricity price was 0.374 yuan / kWh, an increase of 13.51% compared with the same period last year, driving the continuous repair of profits in the first quarter, and the subsequent decline of coal prices will release greater performance flexibility.
Lianghekou and Yangfanggou hydropower stations were put into operation, and the volume and price of hydropower business increased simultaneously. The company holds 52% of the shares of Yalong River hydropower. Since 2021, Lianghekou and Yangfanggou hydropower stations have been successfully put into operation, with an additional installed capacity of 4.5 million KW. In the first quarter of 2022, the hydropower generation capacity was 18.227 billion kwh, a year-on-year increase of 9.05%, the electricity price increased by 7.60%, and the operation is stable. By the end of 2021, the Yalong River hydropower station has put into operation 18.7 million kw of hydropower installed capacity, and the 3.42 million KW projects of Kara and mengdigou hydropower stations are advancing in an orderly manner. After being put into operation, the installed capacity will reach 19.32 million KW, which is expected to further improve the company’s power generation and reservoir regulation capacity and increase the company’s profits.
At the end of the 14th Five Year Plan period, the holding of clean energy installed capacity will reach 36 million KW, with an average annual installed capacity increase of 2.92 million KW. In 2021, the company completed the merger and acquisition of four new energy enterprises, with the installed capacity of Fengguang reaching 3.5725 million KW, accounting for 9.86% of the total installed capacity, and the installed capacity of clean energy accounting for 67.20%. At the end of the 14th five year plan, the company plans to hold an installed capacity of 50 million KW, of which the installed capacity of clean energy accounts for about 72%, and the installed capacity will reach 36 million KW. By the end of 2021, the company controlled 243375 million kilowatts of clean energy installed capacity (an increase of 4.3915 million kilowatts), and 1.77 million kilowatts of clean energy installed capacity under construction (1.01 million kilowatts of hydropower, 700000 kilowatts of wind power and 60000 kilowatts of photovoltaic). According to the planning calculation, it is expected to increase 2.9156 million kilowatts per year. Assuming that the average utilization hours and average on grid electricity price are the same as those in 2021, the new installed capacity will contribute more than 4 billion revenue increment every year during the 14th Five Year Plan period.
Profit forecast and investment rating Sdic Power Holdings Co.Ltd(600886) is a comprehensive power company dominated by hydropower, combined with water and fire and complementary scenery. At the end of the 14th five year plan, the installed capacity of clean energy will reach 36gw. We estimate that the operating revenue of the company from 2022 to 2024 will be 46.825/48.94/49.209 billion yuan respectively, with a year-on-year growth rate of 7% / 3% / 2% respectively, the net profit attributable to the parent company will be 6.310/68.09/6.986 billion yuan respectively, with a year-on-year growth rate of 159% / 8% / 3% respectively, and the PE from 2022 to 2024 will be 11.23/10.41/10.15 respectively. It will be covered for the first time and given a “buy” rating.
Risks suggest macroeconomic downturn; Risk of policy change; The incoming water is lower than expected; Electricity demand is less than expected; Electricity price decline risk
