Event: in the first half of 2021, the company achieved operating income of 53.478 billion yuan, an increase of 28.77% over the same period last year; net profit of 3.317 billion yuan, an increase of 39.01% over the same period last year, and a decrease of 48.63% after deducting non-profit.
Comment
The double rise in grid electricity and electricity prices boosted the company's revenue by 28.77% year-on-year in terms of installed capacity. By the end of the first half of the year, the company had a holding installed capacity of 53411.85 megawatts, of which 42360 megawatts, 8343.45 megawatts and 2708.4 megawatts of renewable energy such as coal, gas and hydropower were installed. Coal-fired power generation units account for about 79% of the total installed capacity, and clean energy generation capacity accounts for about 21%. In terms of utilization hours, affected by the strong demand for electricity, the average utilization hours in the first half of the year was 1936 hours, an increase of 298 hours over the same period last year. Driven by the increase in utilization hours, the company generated a total of 113.241 billion kilowatt hours in the first half, an increase of 21.8 percent over the same period last year. In terms of electricity price, the average grid electricity price in the first half of the year was 420.69 yuan per megawatt hour, an increase of 2.74% over the same period last year. The rise in online electricity and electricity prices increased the company's first-half operating income by 28.77% compared with the same period last year, and its net profit increased by 39.01% compared with the same period last year.
The rise in coal prices and superimposed electricity generation led to a rise in costs. The company's gross profit margin in the first half of 2021 was 48.472 billion yuan, an increase of 40.21% over the same period last year, of which the fuel cost was about 28.184 billion yuan, an increase of 52.34% over the same period last year. The main reason is the year-on-year increase in power generation and coal prices. The unit price of standard coal in the first half of the year was 831.66 yuan / ton, an increase of 33.13% over the same period last year. Affected by this, the company's gross profit margin in the first half of the year was 9.36%, down 7.4 percentage points from the same period last year, the lowest level since 2018. In terms of expense rate, the company's expense rate in the first half of the year was 5.09%, a decrease of 2.31 percentage points over the same period last year. In addition, the investment income of the company in the first half of the year was 4.264 billion yuan, compared with 273 million yuan in the same period last year. On the basis of high investment income and proper cost control, the company achieved a net interest rate of 7.41% in the first half of the year, down 0.25 percentage points from the same period last year.
Holding shares for New Development and promoting the Integration of New Energy assets
In May 2021, the company plans to invest 21.237 billion yuan to subscribe for Fuxin Development's new registered capital of 5.897 billion yuan and acquire 37.19% of its equity. Fuxin Development is a new energy operator, which is 100% controlled by Huadian Fuxin before capital increase. The cash contribution of the company is not less than 7.628 billion yuan, and the price of the contribution company is not more than 13.609 billion yuan, transferring the equity held in 27 new energy companies. In addition, the shares and assets of 10 new energy companies indirectly held by the company will also be sold to Fuxin Development at a price of 2.082 billion yuan.
Profit forecast and valuation: the company raised a total asset impairment loss of 2.106 billion in the first half of the year, superimposing the pressure on the cost side caused by high coal prices. We adjust our profit forecast and estimate that the 2021-2023 net profit will be 40.18x51.32pm (the previous value is 49.850.7x53.7 billion), corresponding to 9.3lb 7.28x6.59 times PE, maintaining the "buy" rating.
Risk hint: the risk of electricity price reduction, the risk of upward coal price, and the risk of macroeconomic downturn.