Company trends
Recent situation of the company
Huaneng International released electricity sales data for 2021: the company's domestic power plants completed electricity sales of 430.165 billion kilowatt-hours in 2021, an increase of 13.23 percent over the same period last year; the average online settlement price was 431.88 yuan per megawatt-hour, an increase of 4.41 percent over the same period last year. For the whole of 2021, the proportion of electricity traded by the company in the market was 61.63%, an increase of 3.3 percentage points over the same period in 2020.
Comment
In 2021, electricity sales increased by 13.2% compared with the same period last year, while coastal electricity accounted for more than half of the total, and scenery accounted for a slight increase.
Sub-power, coal turbine, gas turbine rose 10.8%, 26.2% year-on-year, maintaining a rapid growth rate, 4Q significantly slowed down to about 1.0%, 3.7%. In addition, the company's green transformation strategy under the wind power, photovoltaic performance is excellent, the annual electricity sales increased by about 46.8%, 46.9% to 198.7, 3.41 billion kilowatt hours, accounting for the company's electricity sales increased from 4.2% in 21 years to 5.4%. Hydropower output is weak, year-on-year-6.6%.
By region, coastal provinces accounted for more than 50% of electricity sales, with Shandong, Jiangsu, Zhejiang, Guangdong and Jiangxi accounting for 19.0%, 9.9%, 7.4%, 7.3% and 5.2% respectively, while Shanghai and Fujian each accounted for 4.7%. The top 5 increases in electricity sales were Inner Mongolia (+ 166%), Guizhou (+ 87%), Chongqing (+ 50%), Guangdong (+ 34.8%) and Zhejiang (+ 31.2%).
The performance of electricity price is better than expected, and the increase of 4Q is obvious. The company's comprehensive electricity price increased by 4.4%, which we think is mainly related to 1) high electricity prices and fast electricity growth in coastal thermal power and new energy projects, and 2) year-on-year narrowing of market discounts. In addition, we estimate that the company's 4Q21 comprehensive electricity price is about 474.40 yuan / megawatt-hour, an increase of 13.9% and 14.1% compared with the same period last year and month-on-month.
For the whole year, the new holding installed 5.2GW, Scenic 3.2GW, is lower than expected. In 2021, the company added thermal power / wind power / photovoltaic / biomass installed capacity 2.0/2.4/0.8/0.03GW. Fengfeng put into production is significantly lower than the previously planned 8.34GW, we believe that photovoltaic projects will be delayed due to the price of the industry chain, but do not rule out the possibility that some wind power projects will be centrally connected to the grid in 1Q22.
Valuation and suggestion
Considering the great impact of high coal prices in the fourth quarter and the potential impairment pressure, we lowered the company's 2021 return net profit forecast from profit to a loss of 9.4 billion yuan (a loss of 11.26 billion yuan belonging to common shareholders). However, based on the fact that the current market electricity transaction premium is better than expected, we raise our profit forecast for 2022 to 9.025 billion yuan, and introduce a forecast of 11.51 billion yuan for 2023.
A shares are currently traded at 10.1 times earnings in 2022, 23, 12.9, and H shares are traded at 6.3 in 2022, 23, 4.9 times earnings. Maintain the "outperform industry" rating and target price of 8.27 yuan / 4.90 Hong Kong dollars, corresponding to the 23-year price-to-earnings ratio of 14.4, 11.3 and 7.3, 5.7 times, with upside space of 11.5% and 16.0%, respectively.
Risk
The coal price is higher than expected, and the implementation of market electricity price is worse than expected.