Core ideas:
Have scarce high-quality assets of power grid to lay the foundation for performance growth
Shanxi Local Power Co., Ltd., a wholly-owned subsidiary of the company, is one of the few enterprises in China with independent operation of the power grid, undertaking the power wholesale business in 3 cities and 12 counties (districts) in Shanxi Province, providing power supply to more than 2.8 million people in the power supply area. The company has 6 220kV substations, 44 248kMbot 110kV substations with a capacity of 1830MVA Magi 220kV line, 65 1485kM 35kV substations with a capacity of 3472MVA Magi 110kV line 1429kMbot, and a capacity of 786.95MVAJ 35kV line. The company's core high-quality assets power distribution business as a whole is stable and profitable.
The controlling shareholder is rich in power plant assets to enhance the company's future growth expectations the controlling shareholder Shanxi International Power Group's power generation business involves thermal power, hydropower, wind power, photovoltaic power generation and biomass power generation. At present, the holding and equity installed capacity of the power plant operated by the company is 12.207 million kilowatts (including under construction), of which 5.0088 million kilowatts of controllable installed capacity has been put into production, 3.9922 million kilowatts of controllable installed capacity under construction and 8443 kilowatts of new energy installed capacity. Holding has put into production a total of 10 power plants, holding a total of 8 power plants under construction, a total of 12 power plants.
Accelerating the reform of state-owned enterprises and improving the sustainable development ability of listed companies under the background of the relevant policies of the State Council encouraging the merger and reorganization of state-owned enterprises, the national energy industry, the integration of coal and power, and promoting the coordinated development of coal and power enterprises in Shanxi Province, Shanxi Coal Marketing Group, which is one of the seven main bodies of Shanxi coal integration, and International Electric Power, the company's controlling shareholder, merged and reorganized to form Jinneng Group Co., Ltd. Form five business sectors: coal industry, electric power industry, trade logistics industry, new energy industry and diversified business industry. On February 9, 2017, Vice Governor Wang Yixin of Shanxi Province proposed to make use of the capital market to speed up the reform of state-owned state-owned enterprises in his speech at the provincial work conference on supervision and management of state-owned assets. Jinneng Group will further enhance the expectation of injecting high-quality assets into Tongbao Energy, laying a foundation for the continuous improvement of the company's performance growth.
Profit forecast and valuation:
It is predicted that the operating income of the company from 2017 to 2019 is 4.852 billion yuan, 5.708 billion yuan and 5.725 billion yuan respectively, the net profit is 179 million yuan, 363 million yuan and 367 million yuan respectively, and the shareholders' equity is 4.869 billion yuan, 5.232 billion yuan and 6.00 billion yuan respectively. the corresponding earnings per share are 0.16,0.32 and 0.32 yuan, and the net assets per share are 4.25,4.56 and 4.88 yuan respectively. Combined with the relative valuation results, the overall development trend of the power industry, the company's stable distribution business performance and the expectation of sustainable development are covered for the first time, and Tongbao Energy is given a "neutral" rating, corresponding to a share price of 6.24 yuan in 2017.
Risk Tips:
(1) the risk of rapid decline in coal-fired power generation hours; (2) the risk of rapid rise in coal prices; (3) the risk of declining electricity consumption.