Promoting the energy revolution based on wind, light and new energy production and consumption has become a long-term strategy of our country.
In recent years, global energy is undergoing profound changes from high-carbon to low-carbon, from inefficient to efficient. According to the climate target of "30ram60" in China, the total installed capacity of wind power and solar power will reach more than 1200GW, while the total installed capacity of wind power and solar power in China will be 634GW by the end of 2021. According to this, it is conservatively estimated that from 2022 to 2030, the installed capacity of wind power and solar power in China will have a compound annual growth rate of 7.34%. We believe that under the background that carbon emission reduction has become a national strategy, Fengguang new energy will usher in greater market demand and richer scenario applications, and the installed capacity of wind power and solar new energy has great potential. The wind power and photovoltaic installed capacity target of 2030 is expected to be completed ahead of schedule, and the growth rate of wind power and photovoltaic installation is likely to be greatly improved.
In 2022, considering the economic situation at home and abroad, the central government stressed that economic work should be stable and strive for progress in the midst of stability. According to data from the China Power Union, it is estimated that the electricity consumption of the whole society in 2022 is about 8.7-8.8 trillion kilowatt-hours, an increase of 5 percent over the same period last year. 6% of the installed power generation capacity reached about 2.6 billion kilowatts at the end of 2022, an increase of about 9.4 percent over the same period last year. Among them, the installed capacity of non-fossil energy power generation is expected to reach about 1.3 billion kilowatts, which is expected to reach about 50 percent of the total installed capacity for the first time, and the installed capacity of wind power and solar power will reach 380 million kilowatts and 400 million kilowatts respectively. Compared with the data at the end of 2021, the new installed scale of wind power and solar power in China is expected to reach 50GW and 90GW in 2022.
Rapid growth in power generation of wind power and solar projects
At the beginning of the listing in 2014, the company's traditional energy business dominated, and after the listing, the company's new energy power generation business developed rapidly. As of December 31, 2021, the total installed capacity of the company's equity has reached 8.4GW, including 3.85GW for wind power and 1.14GW for solar power.
The total installed capacity of the company's wind power and solar projects is 4.99GW, accounting for 59.3%. The proportion of equity installed capacity of the company's clean and renewable energy projects and traditional energy projects is 81.4% and 18.6% respectively. At the beginning of listing, the company has been transformed from a company dominated by traditional energy power generation to a company dominated by new energy power generation.
In terms of operating data, by the end of 2021, the company had completed a total of 18162.0 gigawatt hours of electricity generation, an increase of 31.4% over the same period in 2020. Among them, the power generation of wind and solar projects is growing rapidly. The annual power generation of wind power projects is 7624.3 gigawatt hours, an increase of 71.2 percent over the same period last year. Solar power projects generate electricity of 1590.1 gigawatt hours, an increase of 16.7 percent over the same period last year. Wind power and solar power accounted for 51 percent, an increase of 9 percentage points over the same period in 2020.
CGN's new energy project is rich in resources.
China General Nuclear Group, the major shareholder of the company, is the largest nuclear power company in China and the third largest nuclear power company in the world. in recent years, CGN has made great efforts to develop non-nuclear clean energy, wind power, solar energy and other non-nuclear new energy projects have formed a global layout, the project is distributed in 17 countries around the world, and the global new energy installed capacity exceeds 39.2GW, of which the domestic new energy installation is about 28GW, and the overseas new energy installation is about 11.2GW. It is expected that the group's new new energy operation capacity will remain above 3GW every year, and by the end of the 14th five-year Plan, the installed scale of new energy in China will reach 40GW.
Profit forecast and valuation
Combined with the pace of installation in the industry and the resources held by CGN, we estimate that the new installed capacity of wind power, solar power and other projects will be 0.8GW and 0.3GW respectively from 2022 to 2024. The company's operating income from 2022 to 2024 is estimated to be US $18.85,20.30 and 2.133 billion respectively, and its net profit is US $2.66,3.06 and 341 million respectively. The corresponding EPS is HK $0.48,0.56,0.62 respectively (exchange rate: us $1 = HK $7.7865). Using the discounted cash flow method, we calculate that the reasonable value of the company is about HK $25.335 billion, equivalent to HK $5.90 per share (core assumption: sustainable growth of 2.0 per cent, equity cost of 10.88 per cent), corresponding to 12.3 times the dynamic PE in 2022.
Risk hint
The installation of wind power, solar energy and other new energy is not as expected; the group's new energy asset integration is not as expected; fuel costs are rising faster than expected; and the allocation of subsidies receivable is much lower than expected.