This report is read as follows:
The market has a serious lack of awareness of the strategic position of Oriental Energy in SPIC. As SPIC's only listing platform in Beijing, Tianjin, Hebei and the Bohai Rim, the company will greatly benefit from the acceleration of mixed reform in the power industry.
Main points of investment:
For the first time, the "overweight" rating was given, with a target price of 18.04 yuan. The market is lack of awareness of the company's strategic position in SPIC. As SPIC's only listing platform in Beijing, Tianjin, Hebei and the Bohai Rim, the company will greatly benefit from the acceleration of mixed reform in the power industry. It is estimated that the net profit of the company for 16-18 years is RMB 592 million, and the corresponding EPS is RMB 0.82 and 1.07 respectively. Combined with DCF valuation and PE valuation, the company is given a target price of 18.04 yuan, corresponding to 17-year PE17X, lower than the average PE of industry 19X, covering the "overweight" rating for the first time.
The mixed reform will accelerate the securitization of group assets, and three major clues indicate that the company's asset injection will come: at the end of 2016, the central government proposed that the mixed reform of state-owned enterprises should take steps in seven major fields, such as electric power, oil, natural gas, railway, civil aviation, telecommunications, and military industry. in the past three months, the Railway Corporation, China Arms Industry Corporation and State Grid have repeatedly expressed their determination to make mixed reforms. We believe that the acceleration of the current tide of mixed reform will promote the process of asset securitization of the National Electric Investment Group. And three big clues indicate that the company will usher in an asset injection in the future: ① China Power Investment Group achieved a net profit of 8.76 billion in 2016, ranking first among the top five groups. On the other hand, the securitization rate of the group's assets is only 30%, the lowest among the five largest power generation groups (the other four are all over 40%). ② recently, China Electric Power New Energy, China Electric Power, Shanghai Electric Power and other targets have made substantial progress in asset injection one by one; recently, ③ Group has frequently made asset listing as a priority in 2017.
The company is positioned in the group as the "Beijing-Tianjin-Hebei" and "Bohai Rim" new energy integration platform: the company is the only listing platform for SPIC in the "Beijing-Tianjin-Hebei" and "Bohai Rim" areas. According to SPIC's asset integration idea of "regionalization + specialization", the company is likely to become the group's clean energy asset integration platform in North China and surrounding areas. We estimate that the current group in Hebei Province has built 400MW photovoltaic and 150MW wind power capacity can be integrated. In addition, according to our incomplete statistics, the installed capacity of new energy assets in Beijing, Tianjin, Hebei and the Bohai Rim exceeds 2300MW, and the project reserve exceeds 5000MW. These potential resources may become the target of integration in the process of further asset securitization.
Catalyst: Hebei company asset integration plan, SPIC mixed reform plan details issued.
Core risk: SPIC Hebei company asset integration progress did not meet expectations.
