More than 60% have poor performance. Among the 93 listed companies in the power industry, 34 and 2 of the parent company’s net profit increased year-on-year and turned losses into profits in 2021, and 29, 24 and 4 of the parent company’s net profit decreased year-on-year, suffered losses and sustained losses respectively; 1q22 net profit attributable to the parent company increased year-on-year and turned losses into profits in 34 and 2 companies respectively, and decreased year-on-year, incurred losses and sustained losses in 34, 13 and 10 companies respectively.
Thermal power innovation: now the turning point is high. Among the 47 companies in thermal power (including thermal power, biomass power generation, etc.), the net profit attributable to the parent company increased year-on-year in 2021, and 15, 21 and 2 companies experienced year-on-year decline, loss and continuous loss respectively; 1q22 net profit attributable to the parent company increased year-on-year in 13 companies, and decreased year-on-year, incurred losses and sustained losses in 21, 9 and 14 companies respectively. In 2021, the single quarter cost growth of Q1-Q4 exceeded the revenue growth by 4.9, 13.5, 32.8 and 41.7 PCT respectively. 4q21 lost 51.004 billion yuan, breaking the single quarter loss record of 10 billion yuan in 3q21. 1q22, the demand for electricity fell, the output of hydropower increased, the price of electric coal fell, the pressure on the cost side of thermal power eased, the difference in revenue and cost growth narrowed, showing a marginal positive trend; If Q2 coal price falls further, the whole thermal power sector is expected to truly usher in a performance inflection point.
Hydropower: the incoming water is improved as scheduled and is expected to start the harvest season. Among the 21 companies in the hydropower (including geoelectricity) sector, in 2021, the net profit attributable to the parent company increased year-on-year and turned losses into profits respectively, and 11 decreased year-on-year; 1q22 net profit attributable to the parent company increased year-on-year and turned losses into profits respectively, and decreased year-on-year, suffered losses and sustained losses respectively. In 2021, the water supply continued to be weak and the performance of hydropower was weak; The national average precipitation in 1q22 is higher than that in the same period of the year, with 11.9%, 66% and 15.5% higher from January to March respectively. Hydropower may start the harvest season again in 2022.
New energy: the momentum of rapid progress remains unabated. Among the 25 companies in the new energy (nuclear power, wind power and photovoltaic) sector, 16 and 1 respectively had year-on-year growth in net profit attributable to the parent company and turned losses into profits in 2021, and 3, 3 and 2 respectively had year-on-year decline, loss and continuous loss; 1q22 net profit attributable to the parent company increased year-on-year in 13 companies, and decreased year-on-year, incurred losses and sustained losses in 5, 3 and 4 companies respectively. 1q22 new energy sector continued its high-profile momentum. The installed capacity of nuclear power in China increased by 6.6% year-on-year, and the installed capacity of wind power and photovoltaic above the designated level increased by 17.3% and 13.5% year-on-year.
Investment suggestion: the flood season coming in advance and the continuous excessive water inflow have partially verified our previous prediction that the water inflow will improve with a high probability in 2022. Combined with the production peak of Southwest hydropower, hydropower is expected to usher in a bumper harvest year; Electricity demand falls, hydropower output increases, thermal power is under pressure or will be transmitted to upstream coal supply and demand; On April 20, the national Standing Committee approved six nuclear power units at one time, and the normal approval of new units met expectations to ensure the sustainable development of the nuclear power industry; Q1 the utilization hours of wind and light are poor, but the short-term disturbance does not change the long-term trend. The hydropower sector recommends China Yangtze Power Co.Ltd(600900) , and carefully recommends Sdic Power Holdings Co.Ltd(600886) , Huaneng Lancang River Hydropower Inc(600025) ; Recommended for thermal power sector Shenergy Company Limited(600642) ; China National Nuclear Power Co.Ltd(601985) , recommended by nuclear power sector, and Cgn Power Co.Ltd(003816) , recommended with caution; Recommended by scenery operation section China Three Gorges Renewables (Group) Co.Ltd(600905) .
Risk tips: 1) decrease in utilization hours; 2) The electricity price of power grid is reduced; 3) Rising coal prices; 4) Reduction of precipitation; 5) The policy promotion was less than expected.
