New energy power generation conforms to the industrial and policy direction. In 2020, the national thermal power generation will be about 5 trillion kwh, accounting for 71% of the national power generation, and the wind energy and photovoltaic power generation will account for about 9.7%. The transformation of power generation enterprises to new energy is in line with the goal of double carbon policy and helps to optimize the overall energy structure. The national energy administration proposes that the annual consumption of non fossil energy will reach 20% / 25% in 2025 / 2030, and the target of wind power and photovoltaic power generation will account for 11% / 16.5% in 2021 / 2025, which has a broad growth prospect. In the past, "market coal, planned electricity" and other reasons made the profits of China's thermal power enterprises unstable, and even suffered losses in extreme years. With the increase of its new energy installation scale and profit contribution, the periodicity of the profits of power enterprises weakened, and the cash flow situation improved greatly. This is the core logic of the valuation reshaping of traditional power operators.
The proportion of new energy power generation of "five big and four small" power groups (or companies) is increasing. The total installed capacity of "five big and four small" power groups (or companies) accounts for more than half of China's total installed capacity for a long time, and the installed capacity of the five power groups accounts for about 43% of China's total installed capacity. It is estimated that during the "14th five year plan" period, the installed capacity of "five major and four small" new energy sources will nearly double. Among them, the five power generation groups expect to increase the installed capacity of new energy sources by about 320gw from 2021 to 2025, which will be significantly higher than the installed capacity of 186gw at the end of 2020.
The power generation structure of Hong Kong stock power operation sample companies tends to new energy, and the profitability is improved. We selected 9 enterprises whose wind power and photovoltaic power generation businesses were disclosed by Hong Kong stocks as samples, analyzed the power generation, installed capacity change trend and market share of each enterprise's wind power and photovoltaic power generation, and analyzed the changes of power sales structure and profitability of 9 companies from a financial perspective. It was found that the three major factors affecting the valuation of power operators are the main energy type of enterprises Future growth and profitability. (1) From the perspective of the types of power generation enterprises, the P / E valuation of new energy power operators is higher than that of traditional power operators. The former is given the valuation of growth stocks and the latter is given the valuation of cycle stocks. (2) For similar power generation enterprises, the growth of new energy business is an important factor affecting the valuation of power operators. In the next five years, Xinyi energy and China power will take the lead in the installed growth rate of new energy among new energy power and traditional power operators respectively, and their current valuation is also far ahead of similar enterprises. (3) In terms of profitability, Xinyi energy and China Resources Power have better profitability among similar companies, and the P / E valuation also has a premium.
The re valuation of power generation enterprises is reasonable and sustainable. The policy encourages the superposition of wind and solar power generation costs to begin to be better than thermal power generation. The enthusiasm of enterprises for new energy installation has increased greatly, and their profitability and cash flow stability will be greatly improved, supporting the valuation reconstruction of the power industry. At present, the P / E valuation of Companies in the water and waste treatment industry of Hong Kong stocks is less than 8 times, and the P / E of Companies in the gas industry with better growth is concentrated at 8-15 times. Power enterprises, which are also energy operators, have greater growth potential in the process of new energy transformation in the future. We believe that the sector valuation should be more than 15 times P / E, and the reasonable P / E of leading enterprises with high proportion of new energy power generation and excellent governance can reach 25 times. We suggest focusing on Longyuan Power, Xinyi energy, Datang new energy, China Resources Power, Huadian Power International Corporation Limited(600027) , Huaneng Power International Inc(600011) , China power, etc.
Risk tip: there is a risk that the installed capacity of new energy does not meet the expectations, the market may be overly optimistic about the investment sentiment of the power station, and the insufficient peak shaving capacity of the power grid may lead to the risk that the installed capacity of new energy power generation does not meet the expectations.
