Risk release opportunity coming
Asset injection expectations: in 2010, we will issue additional assets to major shareholders. The fundamentals have changed significantly. 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 5 times that of the company, and it has made promises. It is expected that asset injection will 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 management fees are expected to exceed expectations: the company currently takes custody of group assets and charges management fees in the form of fixed fees and floating fees. 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.
Utilization hour decline: 2012 is the peak period for thermal power units in Henan Province, and more thermal power units were put into operation from 2013 to 2014, but due to the large proportion of high energy-consuming industries in local electricity consumption, the growth rate of electricity consumption decreased significantly, taking into account the impact of Hami-Zhengzhou UHV DC power transmission, thermal power utilization hours in Henan Province will decline compared with the same period last year. In 2011, due to special reasons, the company's utilization of hours is relatively high, which is expected to decline gradually and return to the normal level. It is expected that the decline in the use of hours in the past two years is higher than the average level of Henan Province.
The average price of coal is expected to continue to decline: thanks to the decline in coal prices since June 2012, the company's performance has improved quarter by quarter, and the company has turned losses into profits for the whole of 2012. Contract coal and market coal in Henan Province have been significantly inverted. The company is one of the biggest beneficiaries of the cancellation of the two-track system of thermal coal, and the average purchase price of coal is expected to fall 1% and 12% from 2012 to 2013 compared with the same period last year.
Investment suggestion: the margin of safety is high. In terms of excluding the expected asset injection and the floating cost of custody fees, the EPS from 2012 to 2014 is expected to be 0.07,0.40 and 0.35 yuan respectively, corresponding to 62.0,11.3 and 12.8 times of PE, which is equivalent to 3931 yuan per kilowatt from the perspective of enterprise value. If there is the possibility of exceeding expectations in the event of asset injection or obtaining the variable fee of the entrustment management fee, the "Buy-A" investment rating will be given for the first time, with a 6-month target price of 6 yuan.
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.
