Items:
China General Nuclear New Energy issued a pre-increase announcement on August 17, 2021, and its net profit in the first half of 2021 is expected to increase by 55% year-on-year, or about 1.15 billion yuan. The growth in performance is mainly due to the increase in the scale of wind power and photovoltaic, as well as the improvement of power generation resources and the increase in power generation of existing power stations this year. In the first half of 2021, power generation increased by 34.6 percent year on year to 9.23 billion kilowatt hours, of which wind power projects increased by 70.2 percent, photovoltaic projects increased by 24.5 percent, thermal power projects in China increased by 38.5 percent, and thermal power projects in South Korea increased by 18.2 percent.
Guoxin Dianxin's new point of view: 1) increase in installed scale, superimposed scenery resources improve, raise profit forecast for the whole year; 2) offshore wind power project rush installation progresses smoothly, 582MW offshore wind power project is expected to be put into production by the end of this year; 3) risk hint: domestic new energy power generation planning is not as expected; domestic new energy construction consumption appears bottleneck; electricity price of new bidding project is lower than expected; interest rate upward increases the company's financial cost. 4) Investment suggestion: based on the mid-term performance forecast, the profit forecast is raised, and the estimated return net profit for 2021-2023 is 1.897-2.277 billion (the original forecast is 1.495-1.805), corresponding to EPS 0.44-0.51. Combined with the absolute and relative valuation method, the reasonable valuation range of the company is raised to 5.40-6.00 yuan (the original range is 4.93-5.48 yuan). It is equivalent to HK $6.51-HK $7.23 (HK $1.83), corresponding to the dynamic PB of 2.51max in 2023 and 11.1max in 2023, which represents a premium of 73% to the current stock price and maintains the "buy" rating.
Comments:
Improvement of scenery resources, recovery of superimposed power load, laying the foundation for high growth performance in the first half of 2021, the company's cumulative power generation increased by 34.6% compared with the same period last year, reaching 9.23 billion kWh, of which wind power projects increased by 70.2% and photovoltaic projects increased by 24.5%. Mainly due to the improvement of wind resources, the number of hours utilized in transportation power generation projects increased significantly, and the newly put into operation of wind power and photovoltaic projects contributed profits. China's thermal power projects increased by 38.5%, mainly due to the outage of a project in Hubei and failed to generate electricity due to the epidemic in the first half of 2020, while thermal power projects in South Korea increased by 18.2%, mainly due to the overhaul of units and the increase in power grid dispatching load in May last year.
In July 2021, the company's monthly power generation increased by 54.0% compared with the same period last year, reaching 1.59 billion kWh, of which wind power projects increased by 110.4%, photovoltaic projects increased by 19.6%, and thermal power projects in China decreased by 20.0%. This is mainly due to the obvious decrease in the dispatched electricity of Hubei gas project in July compared with the same period last year, and the maintenance of a unit of Jiangsu cogeneration project in July. Thermal power projects in South Korea increased by 44.5%, mainly due to the increase in power grid dispatching load.
The offshore wind power project is expected to reach production on schedule. Guangzhou Nuclear Power Group plans to add 6-7GW non-nuclear clean energy installation annually during the 14th five-year Plan period. Currently, it has the offshore wind power approval project 11.5GW, and it is expected that the group will increase the new energy installation scale at about 30-35GW during the 14th five-year Plan period.
In accordance with the company's annual goal of adding sea breeze, land breeze and photovoltaic not lower than 1GW in 2021-2025, combined with the expected pace of industry installation and the resources held by the group, we make the following prospects for the new installed capacity, capital expenditure and development market share of listed companies in the next five years. It is expected that by the end of 2025, the installed capacity of the company's equity will grow from 7.55GW to 15.85GW, and the installed capacity of new energy will grow from 4.1GW to 12.4GW.
It is expected that the unit cost of new energy projects will continue to decrease in the next few years, and the feed-in electricity price will also decrease year by year due to the introduction of parity and bidding mechanism, but at the same time, the annual utilization hours of new projects will show an upward trend. with the transfer of offshore wind power development area, the increase in utilization hours is more obvious.
Investment suggestions: improve the stock and increase the increment to reach production, raise the profit forecast 1) increase the installed scale, improve the scenery resources, and raise the profit forecast for the whole year; 2) the rush installation of offshore wind power project is progressing smoothly, and it is expected to be put into production of 582MW offshore wind power project by the end of this year; 3) risk hints: domestic new energy generation planning is not as expected; domestic new energy construction consumption appears bottleneck; electricity price of new bidding project is lower than expected. Rising interest rates increase the company's financial costs. 4) Investment suggestion: based on the mid-term performance forecast, the profit forecast for 2021-2023 is expected to be 1.897-6.07 billion (the original forecast is 1.495-1.805), corresponding to EPS 0.44-0.51. Combined with the absolute and relative valuation method, the reasonable valuation range of the company is raised to 5.40-6.00 yuan (the original range is 4.93-5.48 yuan). Equivalent to HK $6.51-HK $7.23 (HK $1 = HK $0.83), corresponding to the dynamic PB of 2021 Universe 2022 / 2023 is 2.5 PE 2.1 prime 1.9 times, and 2021 Universe 2023 dynamic PE 12.9 Sterling 11.1 Sterling 10.6 times, compared to the current share price premium of 73% Muoi 92%, maintaining the "Buy" rating.