\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 905 China Three Gorges Renewables (Group) Co.Ltd(600905) )
Event: the company released its 2021 annual report and the first quarterly report of 2022. In 2021, it realized an operating revenue of 15.484 billion yuan, a year-on-year increase of 36.85%; The net profit attributable to the parent company was 5.642 billion yuan, a year-on-year increase of 56.26%; In the first quarter of 2022, the company realized an operating revenue of 5.789 billion yuan, a year-on-year increase of 51.84%; The net profit attributable to the parent company was 2.264 billion yuan, a year-on-year increase of 51.45%. It is proposed to pay dividends of RMB 10.22 per share to all shareholders.
The substantial increase in operating revenue and profit mainly benefited from the significant increase in the total installed capacity of Fengguang during the reporting period. In 2021, the company achieved a revenue of 15.484 billion yuan, a year-on-year increase of 36.85%; The net profit attributable to the parent company was 5.642 billion yuan, a year-on-year increase of 56.26%. We believe that the substantial growth of revenue and profit during the reporting period mainly benefited from the significant increase of Fengguang’s installed capacity: 1) operating revenue is mainly determined by the installed capacity, equipment utilization hours and on grid electricity price. At the end of the year, the total installed capacity of the holding company reached 22.9gw, a significant increase of 7.3gw compared with 15.6gw at the beginning of the reporting period, an increase of 46.8%, close to half of the historical installed capacity, which played a decisive role in the growth of the company’s operating revenue and profit; From the perspective of utilization hours, the average utilization hours of wind power in 21 years was 2314h, an increase of 77h over the previous year, and the hours of photovoltaic power generation was 1385h, which was basically the same as that of the previous year; Affected by the implementation of non subsidized electricity prices for some wind and solar new projects, in terms of average electricity price, the electricity price of wind power photovoltaic power generation in 21 years decreased by 2.69% and 11.65% respectively year-on-year, resulting in a year-on-year decrease of 5.11% in comprehensive electricity price. We believe that the significant increase in installed capacity and the year-on-year increase in equipment utilization hours largely offset the impact of the decline in electricity prices, resulting in a significant increase in annual operating revenue and profit.
With the technological progress of wind power photovoltaic industry and the broad installation space under the background of double carbon policy, and the strengthening of price elasticity under market-oriented transactions, scenery operators are expected to fully benefit from the development of the industry. With the rapid promotion of large-scale wind turbines and the optimization iteration of cells in different PV technology paths, the current hourly power cost of wind power generation has decreased rapidly, which improves the economy of new energy power generation. At the same time, as the most important component of the initial investment cost of new energy power generation operators, equipment units have fully benefited from large-scale cost reduction and photovoltaic module price reduction. According to the prediction of the global energy Internet development cooperation organization, by 2030 and 2060, the total installed capacity of wind / light in China will reach 825 million KW and 2.5/3.8 billion kw respectively. Based on this, we predict that the installed capacity of scenery will increase by 10 times in the next 40 years, and the broad installed capacity will become a strong support for downstream operators to invest in power station projects. At the same time, in terms of on grid electricity price, some green electricity transaction prices have recently reached 20% of the benchmark price of coal for top grid transaction. We believe that with the promotion of the marketization of electricity price in the future, the electricity price elasticity is expected to be strengthened, resulting in the income elasticity of operators, and the future scenery operators are expected to fully benefit from the development of the industry.
As the leader of China’s scenery operators and the leader of offshore wind power, we are optimistic about the company’s advantages in resources and capital under the background of strong shareholders, and firmly optimistic about the company’s leading position in offshore wind power. As the strategic implementation subject of the new energy business of the Three Gorges group, the installed capacity is planned to be 50gw during the 14th Five Year Plan period, and the company’s new installed capacity of 7.3gw in 21 years has exceeded the company’s expected development goal of no less than 5GW. Therefore, we speculate that the company will maintain an average annual installed growth rate of no less than 6.8gw in the future. At the same time, as a pioneer in the field of offshore wind power in China, the company has been deeply engaged in the field of offshore wind power, continued to carry out technical exploration, and has formed a number of national demonstration projects and the construction of characteristic industrial parks. In 21 years, the installed capacity of offshore wind power has increased by 4.58gw, accounting for 2.5pct to 17.34% of the national market share year-on-year, and the leading position has been further consolidated. We are optimistic about the company’s strong resource reserves and financial strength: 1) during the reporting period, the company’s new project approval / filing and new construction indicators exceeded 16GW, and obtained 6.85 million KW base projects from the first batch of about 100 million KW large-scale wind power photovoltaic base projects in the country. 2) In the past 21 years, the company distributed a cash dividend of 1.083 billion yuan (including tax), with a dividend rate of nearly 30%. The company has strong financial strength, and the dividend returns to shareholders. With the gradual settlement of the arrears of subsequent renewable energy subsidies, the company’s cash flow is expected to improve. We believe that in the context of the rapid development of the industry, as the leader of new energy operation, the company is expected to fully benefit from the development of the industry and consolidate its leading position.
Profit forecast and investment rating of the company: we expect the net profit of the company from 2022 to 2024 to be 8.075 billion yuan, 9.868 billion yuan and 11.251 billion yuan respectively, corresponding to EPS of 0.28, 0.34 and 0.39 yuan respectively. The current stock price corresponds to PE values of 21, 17 and 15 times for 22-24 years respectively, maintaining the “strongly recommended” rating.
Risk warning: the installed capacity is less than expected, the power generation is less than expected, and the electricity price is down.
