Main points of investment
Profits grew by 16.98% in the first half of 2021, and the scenery sector grew strongly:
In the first half of 2021, the company achieved revenue of about 16.543 billion yuan, an increase of 26.71 percent over the same period last year; net profit attributable to shareholders was about 1.372 billion yuan, an increase of 16.98 percent over the same period last year; and basic earnings per share was 0.13 yuan. During the period, the company's wind power and photovoltaic power sales increased by 40.91% and 54.06% respectively compared with the same period last year, while profits increased by 37.40% and 21.44% respectively.
By the end of 2021, clean energy will account for more than 50% of the installed capacity:
As of June 30, 2021, the combined installed capacity of the company's power plants reached 28429.7 megawatts, an increase of 3421.0 megawatts over the same period last year. Among them, the combined installed capacity of clean energy, including hydropower, wind power, photovoltaic power and gas power, is 13389.7 megawatts, accounting for about 47.10% of the total installed capacity. With the sale of part of the stake in Shentou thermal power plant and the commissioning of new energy installation in the second half of 2021, the company is expected to account for more than 50% of the installed capacity of clean energy by the end of 2021.
Layout energy storage, actively develop comprehensive smart energy and innovative business:
On August 19, 2021, the company announced the establishment of Xinyuan Intelligence Storage Co., Ltd., a joint venture with Beijing Hyboschuang Technology Co., Ltd., and officially entered the energy storage industry. Xinyuan smart storage business focuses on the development, investment and EPC (design, procurement, construction, etc.) of energy storage power plant projects, and plans to win an energy storage project with GWh capacity within half a year after its establishment this year. In addition, the company also actively distributes the field of green power transportation, high-end nuclear power testing technology services and comprehensive intelligent energy business to create new growth points of future profits.
Maintain the buy rating and raise the target price to HK $4.26:
At present, the company's PB is only 0.83 times, which is lower than the comparable company valuation in the industry. Based on the company's commitment to pay out no less than 50% dividend per year, the company's valuation is still at a high margin of safety. Recently, the restrictions on the rise of electricity prices have been liberalized one after another, and we expect that the comprehensive electricity price will be raised in the future, which will enhance the company's profits. We raised the company's target price to HK $4.26, which is equivalent to 15 times PE and 1 times PB level in 2021. The target price has 28% room to rise from the current price, maintaining the buy rating.