Backed by China Power Investment Group to transform into a comprehensive clean energy supplier
The company originally belonged to Dongfang Thermoelectric Gas Group under the Shijiazhuang Economic and Trade Commission. It was transferred to China Power Investment free of charge in 2013 and became China Power Investment's listing platform. The company is mainly engaged in traditional power business. After the transfer, China Power Investment successively injected photovoltaic assets and cogeneration assets into Liangcun Thermal Power and Heating Company. Currently, the company has 660 MW of cogeneration and power, 70 MW of grid-connected photovoltaic power plants, and the new energy projects under construction and storage have reached GW level.
Located in Beijing-Tianjin-Hebei, taking advantage of the country's transformation
At the end of 2016, the Central Economic Conference was held. The power industry was at the top of the seven major industries of state-owned enterprise reform. The asset securitization process in the industry accelerated, and the company would benefit from the integration of group assets. At the same time, the establishment of Xiong'an New Area will speed up the Beijing-Tianjin-Hebei integration process. The company is China Power Investment's listed power company in the Beijing-Tianjin-Hebei region, and has a location advantage for inland new energy development.
Jointly with central and local state-owned enterprises to explore the new energy sector, lay out the electricity sales side to benefit from the electricity reform dividend. Since 2017, the company has signed strategic cooperation agreements with various companies such as Shanghai Aviation Industry, China Power Investment Sichuan Company, Shanxi Installation, and Kyushu Zongheng, and has joined forces with large central enterprises and local state-owned enterprises to actively explore the company's new energy landscape. However, the company's cogeneration assets are expected to gradually pick up as the coal power industry hits the bottom. In July 2016, the company invested 201 million yuan to establish Hebei Liangneng Electricity Sales Co., Ltd. and actively participated in market competition on the electricity sales side. 90% of the company's Liangcun Thermal Power customers are industrial enterprises, and after the regional electricity sales side is liberalized, it can benefit first from electricity reform dividends through the customer base.
Seize the reform opportunities of state-owned enterprises and give them a careful rating to increase holdings
As a listing platform owned by China Power Investment, one of the five major power generation groups, the company has benefited from the accelerated pace of asset securitization under the reform of state-owned enterprises. The company's EPS from 2017 to 2019 is expected to be 0.86, 1.15, and 1.41 yuan/share, corresponding to the valuations of 16X, 12X, and 10X, giving a careful increase in holdings rating.
Risk warning:
The reform process of state-owned enterprises fell short of expectations; the commissioning of new energy projects fell short of expectations.