The performance is in line with expectations: it is estimated that in the first half of 2013, the net profit of shareholders belonging to listed companies is 95 million yuan to 120 million yuan, and the basic earnings per share is 0.15 yuan to 0.19 yuan, turning losses into profits (a loss of 88.54 million yuan in the first half of 2012). The performance is basically in line with our previous expectations.
The decline in coal prices and the improvement of performance: the main reason for the increase in performance is the decline in coal prices. In terms of electricity, due to factors such as the slowdown in economic growth and the increase in social installed capacity, electricity sales fell by 10% in the first half of the year compared with the same period last year, and power generation revenue decreased compared with the same period last year. However, power generation costs have dropped more sharply, while the company has deployed funds to reduce financial expenses, which combined to increase profits.
Asset injection expectation: the company issued additional assets to major shareholders in 2010, and there has been a major change in fundamentals. at present, the assets are clean, simple and burden-free. The parent company has a serious shortage of cash flow, fewer projects under construction and high asset-liability ratio, so it is difficult to change the status quo through its own development. The group's equity capacity is about five times that of the company, and it has been promised that asset injection is expected to be a high probability event in the future. We have simulated the asset injection plan, although it may be different from the real situation, but the asset injection will thicken the company's performance is basically certain.
Escrow fees may exceed expectations: the company currently takes custody of group assets and charges management fees in the form of fixed fees and floating fees, and if the escrow agreement is renewed and the terms remain unchanged, it is expected to receive variable fees from 2013 onwards, there is a possibility of exceeding expectations.
Investment suggestion: without considering the asset injection, do not adjust the profit forecast for the time being. The company's EPS from 2013 to 2015 is expected to be 0.35,0.33 and 0.35 yuan respectively, corresponding to 17.8,18.5 and 17.6 times PE. In view of the current high valuation, it is downgraded to "overweight-A", with a six-month target price of 6.3RMB.
Risk hint: the electricity price of the first-phase power station is reduced; the utilization hour drops sharply; the decline of coal price is lower than expected, etc.
