Main points of investment
Event: visit the 100MW photovoltaic leader project located in Datong coal mining subsidence area of Shanxi Province, and communicate with the management of the company and the management of the power station.
China Merchants New Energy has become the largest shareholder of the company. The company is China's leading investment operator focusing on solar power stations, mainly engaged in the development, investment, operation and management of photovoltaic power stations. At present, China Merchants New Energy has become the largest shareholder of the company, with a shareholding ratio of 24.05%. China Merchants New Energy is a platform holding company specializing in new energy investment under China Merchants Group, which is the first central enterprise in China with a history of more than 140 years and is one of the four major central enterprises in Hong Kong. In the future, the company will rely on the advantage of major shareholders of new energy to quickly and effectively promote the construction, acquisition and operation of photovoltaic power station projects.
The rise in electricity generation helped boost the company's performance. The company achieved revenue of about 937 million yuan in 2015, an increase of 113.5% over the same period last year. The net profit was about 361 million yuan, an increase of 17.4% over the same period last year. Among them, the revenue of electric power sales in 2015 was 175 million yuan, and the subsidy for electric power sales was 455 million yuan, accounting for 67.3% of the revenue. The company's total installed capacity of solar power stations in the second quarter of 2016 was 996MW and generating capacity was 342421 MW hours, an increase of 51 per cent over the same period last year. With the continuous rise of the company's electricity generation, it will help the company's performance to rise.
The frontrunner project will be connected to the network, and more projects may be won in the future. The company won the 100MW photovoltaic power station project in Shanxi Datong coal mining subsidence area in August 2015, and became one of the first photovoltaic enterprises selected in the front-runner plan. The project was successfully connected to the grid and started to generate electricity on June 24, 2016. The National Energy Administration plans to add eight photovoltaic leader technology bases in 2016, expanding the size of the photovoltaic leader demonstration base to 5.5 million kilowatts. As the leader of the "frontrunner program", the company is expected to win more frontrunner projects in the future.
Accelerate the acquisition and expansion of photovoltaic power stations, and the project reserves are rich. The company's photovoltaic power station project is mainly acquisition, supplemented by independent development and construction. The company has strict acquisition conditions, and the acquired power station project requires that it has been connected to the grid, the internal rate of return is not less than 8%, has a valid power purchase contract and the seller provides power generation guarantee. In this way, we can not only avoid the danger of power station development and construction, but also obtain long-term and stable electricity income. Through the continuous acquisition of projects at home and abroad, the company is currently rich in project reserves. There are 27 solar power plants in China, with a total installed capacity of 1GW, and overseas projects have a reserve of nearly 2GW.
Our point of view: United Photovoltaic (686.HK) is a listed platform for clean energy operation under China Merchants, a large central enterprise, and China Merchants New Energy is the largest shareholder of the company. The company relies on strong shareholder support, using flexible and diversified financing methods, through mergers and acquisitions and other ways to rapidly increase the installed capacity of photovoltaic, and the power consumption of the Internet is also growing rapidly. It is expected that the company's installed capacity and online electricity will continue to grow rapidly in the future, while increasing efforts to build self-built power stations. According to the unanimous expectation of Wind, the company's forecast EPS for 2016 and 2017 is 0.08,0.13 yuan, corresponding to the current stock price of HK $0.59, Pmax E is 7.4,4.5 times, while the static Pmax E is 7.4 times, the company's valuation is not high, so investors are advised to pay close attention.
Risk tips: power plant project acquisition risk, power plant operation risk.