Main points of investment:
The basic situation of the company. The company currently has an installed capacity of 5.979 million kilowatts and a rights and interests installed capacity of 5.64 million kilowatts. Among them, Tashan Power Generation, Tonghua Power Generation, Wangping Power Generation and Tong Coal Thermal Power are the power assets purchased by issuing shares to Tong Coal Group.
Coal prices remain in the doldrums and profits are expected to pick up month-on-month in 2014. In the weak environment of the coal market, the company currently adopts the market price model, and the company will directly benefit from the decline in coal prices. So far, the average price of thermal coal in the southern suburbs of Datong in 2014 is 408.02 yuan / ton, which is-9.85% lower than that in 2013. according to the current average coal price, the company's profitability will be further improved in 2014.
The hour of power generation continues to deteriorate. The growth rate of power demand in Shanxi Province remains sluggish, with the cumulative growth rate of electricity demand falling to 0.74% from January to May. The hourly growth rate of thermal power generation also continued to decline, with the hourly growth rate of power generation falling-4.56% from January to May compared with the same period last year, further worsening. At present, in the industrial structure dominated by energy and raw materials in Shanxi Province, under the background of the continuous decline in energy demand and prices, it is difficult to improve significantly in the short term. The company's power generation hours are relatively low in the first half of the year. According to historical experience, the company's electricity demand is relatively good in the third and fourth quarters due to the cooling of air conditioners in summer and heating in winter, and the company's power generation is expected to improve in the third and fourth quarters.
Electricity price reduction is expected to start again. Coal prices are now about 10% lower than in 2014, and coal-power linkage is expected to rise again. However, due to the annual cycle of coal-power linkage, we do not expect coal-power linkage to be introduced in the near future. it is expected that if coal prices continue to decline, coal-power linkage is expected to start by the end of 2014. The last coal-power linkage, Shanxi Province reduced 0.9 minutes per kilowatt hour, lower than the national average of 1 minute per kilowatt hour. According to the decline in coal prices, it is expected that the coal price will be reduced by about 1 point per kilowatt-hour.
In the later stage, the reserve project is rich, and the installed scale is expected to double. The company is currently under construction installed capacity of 2.5 million kilowatts, rights and interests installed capacity of 2.5 million kilowatts. The power assets built by the company group are 2 * 330000 kilowatts of Datang Thermal Power Phase II and 4 * 49500 kilowatts of Shanyinuquan wind power. The group promises to inject into listed companies after completion, and is expected to start injection in the near future. In addition, the 2 * 600000 kilowatt units of Tashan Phase 2 and 2X35 units of Shuonan Thermal Power Plant, which are reserved at the group level, may adopt the mode of injecting into the listed companies after the construction of the group in the future, or the mode of being built directly by the main body of the listed companies. Overall, the company level and group level total thermal power installed capacity of 5 million kilowatts, wind power installed capacity of 198000 kilowatts, reserve equity installed capacity is basically close to the company's current equity installed capacity of 5.64 million kilowatts.
Asset injection is something to look forward to. (1) the promised power assets are expected to be injected in the near future. We expect Datang Phase II 2 * 330000 kilowatts and Shanyinzhi Nu Quan Wind Power to be the first to be injected into listed companies, and are expected to be acquired in the form of cash acquisition or additional issuance to Tong Coal Group. However, the overall volume of injected assets is smaller than the company's current assets, which is expected to have a weak impact on the company's earnings per share. (2) the promised injection of coal resources may be temporarily shelved due to the deterioration of coal profits.
Profit forecast and investment rating. We estimate that the company's earnings per share from 2014 to 2015 will be 0.23,0.26 yuan respectively, corresponding to the current price-to-earnings ratio of 12 times and 11 times respectively. Considering that the company is currently under construction and has a large installed capacity, the installed scale of the thermal power company is growing well. In addition, the company relies on the same coal group, and it is expected to inject some high-quality coal resources after the improvement of coal profitability in the future, so as to ensure the integrated operation of coal and power and reduce operating risks. Give comprehensive consideration to the investment rating of "increasing holdings".
Investment risk. 1, the electricity price is lower than expected; 2, the macro-economy of Shanxi Province remains in the doldrums, and the power generation hour continues to decline; 3, the coal price rises higher than expected.
