Main points of investment
In the first quarter of 2022, the company's revenue increased by 5.83% to 10.422 billion yuan, while its net profit decreased by 21.33% to 2.254 billion yuan. Of this total, wind power revenue reached 7.072 billion yuan, down 4.4% from the same period last year, and thermal power revenue reached 3.159 billion yuan, an increase of 32.3% over the same period last year. During the reporting period, the company made two financial adjustments: 1) the wind power assets acquired by the parent company were delivered in January this year, and the financial data of the same period last year were retroactively adjusted; 2) in terms of accounting policies, in accordance with the requirements of the new accounting standards issued by the Ministry of Finance, the accounting treatment of external electricity sales during the construction period is adjusted from deducting the cost of the base construction period to the income from electricity sales. According to the adjustment, the company's operating income increased by 14.98% compared with the same period last year; the return net profit decreased by 9.54% compared with the same period last year, mainly due to the mediocre performance of wind power utilization hours in the first quarter of 2022 due to the high base in 2021. As a result, the power generation data increased by only 5.13% compared with the same period last year, but with the growth of the company's new energy installation scale, depreciation and amortization increased, and operating expenses increased by 22.74%.
In the first quarter of 2022, the company's wind power data were similar to the national situation, with mediocre performance. The company's wind power generation increased by 5.13% year-on-year to 15.142 billion kilowatt-hours, of which 1 and 2
、 3
The monthly changes were-17.28%, + 6.51% and + 27.82%, respectively.
From the perspective of the national wind power situation, the national wind power increased by 5.7% in the first quarter compared with the same period last year, of which it decreased by 7.50% from January to February and increased by 31.97% in March. China Longyuan Power Group Corporation belongs to the green power operator with asset layout in the country. After excluding the impact of asset injection from the parent company, the trend of wind power generation is similar to the national trend.
In the second quarter and second half of 2022, the company's wind power generation may return to excellent performance. In order to eliminate the influence of the increase of installed capacity, we analyze the change of wind power utilization hours in the whole country. According to the national situation, from January to February in 2022, the utilization hours of wind power in China decreased by 23% to 323 hours compared with the same period last year, while in the same period from 2018 to 2021, the data were 387,351,313 and 419 hours. It can be seen that during this period, the national wind power utilization hours were affected by last year's high base, and the performance was mediocre, close to the 2020 level, but in March, the national wind power utilization hours returned to 232 hours, an increase of 16% over the same period last year, close to the 2020 level, and more than 2018-2019. No longer troubled by the high base. According to the historical data in 2021, except for the 34% increase in wind power utilization hours in January-February compared with the same period in 2020, the growth rate in April-May was only 10%, and only 6-8% in June-December. Therefore, we believe that the company's wind power generation performance in the first quarter is a normal natural phenomenon, with the arrival of the second quarter and the second half of the year, the national and company wind power utilization hours and power generation level will return to the normal year-on-year growth rate. The company's wind power revenue and profits will also return to normal growth.
Our point of view: from January to February this year, due to the impact of last year's high base of wind resources, the company's performance declined temporarily. We believe that looking forward to the whole year, there is no need to worry excessively about the year-on-year performance of wind power generation, while the company, as the national leader in wind power operation, will be the first to benefit from the possibility of solving the problem of subsidy arrears, and the cash flow is expected to usher in a substantial improvement, and there may be room for further improvement in valuation. At present, the company has completed the action of opening up the financing channels between the two places, and we believe that its A-share financing placement is beneficial to Hong Kong shareholders, and we look forward to the flexibility of installation growth brought by the asset injection of the parent company. We keep the company's profit forecast unchanged, thinking that from 2022 to 2024, the company's operating income will reach 414.90, 444.18 and 48.264 billion yuan, and the return net profit will reach 75.30,85.11 and 9.221 billion yuan. Maintain a "buy" rating, giving the company a target price of HK $22.10, corresponding to 20 times PE in 2022.
Risk hint: the implementation of the policy is not as expected and the incoming wind is not as expected.