Core ideas:
Guangxi regional hydropower leader, high dividend highlights the value model. Datang Group has injected hydropower assets into the company many times. By the end of 2022, the company has installed 12.54GW, of which 10.23GW has been installed. The company's hydropower station construction time is early and the unit investment is low, and the ROE level is in the forefront of the industry.
Since 2017, the company has maintained a dividend rate of more than 60%, and the allocation value of high dividends is outstanding. In 2022, the company is expected to achieve a net profit of 3.05 billion 3.15 billion yuan (compared with the same period last year).
Abundant water supply + stable electricity price promotes performance reversal, long-term hydropower planning and installation of 3.94GW. Longtan Hydropower Station is the core of the company, contributing about 70% of its profits over the years. From the perspective of historical data, there is a strong correlation between power generation and incoming water of Longtan Hydropower Station. In 2022, the inflow of Hongshui River was abundant compared with the same period last year, the discharge of Longtan Hydropower Station increased by 29.6% compared with the same period last year, and the company's hydropower generation increased by 23.2% compared with the same period last year. In 2021, Guangxi cancelled a number of hydropower profit reduction policies, such as a 10% reduction in the price of hydropower during the flood season, and the company's average electricity price rebounded somewhat. At the same time, Longtan Hydropower Station was included in the 14th five-year Plan of Southern Power Grid to achieve "full price protection." electricity price stability will effectively reduce the company's performance fluctuations. In the long run, there is still room for growth in the company's hydropower installation, and the total installed capacity of Songta + Badu Power Station is planned to reach 3.94GW.
Vigorously develop new energy, and plan to invest in Fengguang installed total 2.06GW. From 2021, the company will launch new energy construction, rely on Hongshuihe cascade power station to promote water-light integration base, and actively promote the acquisition and construction of offshore wind power and roof photovoltaic projects. In 2022, the company put into production four photovoltaic projects with a total installed 169.1MW. According to the company announcement statistics, the 22 scenic projects on hand have not been fully put into production, and the total installed 2.06GW (photovoltaic 1.75GW, wind power 0.31GW), the project profitability is good, and the total investment IRR of research is more than 6.5%.
Profit forecast and investment advice. It is estimated that the homing net profit of the company in 2022 and 2024 is 30.9, 29.1 and 3.15 billion yuan, respectively, and the PE corresponding to the latest closing price is 13.9 times of 14.1, 15.0, respectively.
The allocation value of high dividend is outstanding, and there is plenty of room for the growth of new energy business. With reference to the industry valuation, the company is given a 20-fold PE valuation in 2023, corresponding to a reasonable value of 7.38 yuan per share, and a "buy" rating for Laureate Electric Power.
Risk hint. Fluctuation of incoming water; fluctuation of feed-in electricity price; project construction is not as expected.
