The largest clean power generation enterprise in Gansu Province, with an installed capacity of 2.75 million kilowatts
The company is the largest clean energy enterprise in Gansu Province, including hydropower, landscape and other clean energy enterprises. by the end of 2018, the installed capacity of the company's rights and interests is 2.75 million kilowatts, including hydropower 179.7 (65%), wind power 81.8 million and photovoltaic 13.6 million kilowatts. In 2018, the company has an operating income of 2.306 billion yuan and a net profit of 485 million yuan. The controlling shareholder of the company, Gansu Dian Investment Group, holds 62.54% of the shares in the company, and the actual control is the Gansu Provincial SASAC.
The scale of hydropower installation is stable, and incoming water determines profit.
At the end of 2018, the company installed 1.797 million kilowatts of hydropower and completed 7.24 billion kilowatt-hours of generating capacity, accounting for 65% and 83% of the installed and generated electricity, which is the main component of revenue and profit. Hydropower stations are mainly distributed in Bailong River, Heihe River, Datong River, Tao River and the main stream of the Yellow River. The future investment expenditure of hydropower business is relatively limited, and the profit is mainly affected by the upstream water situation, contributing more than 1 billion yuan to operating cash flow every year.
Online spending has been intensified, and profitability has been further improved.
The company's new energy business focuses on wind power and photovoltaic units in Gansu Province, with installed scales of 81.8 and 13.6 million kilowatts respectively at the end of 2018. Scenery business is subject to the problem of online consumption, and its profitability has been weak in the past few years. Since 2018, Gansu Province has further increased the consumption of renewable energy based on wind power and photovoltaic, and the wind power and photovoltaic business will turn from losses to profits in 2018, and the profitability will still be further improved in the future.
There is room for repair in valuation, giving a rating of "overweight".
It is estimated that the company's net profit from 2019 to 2021 will be 560 million yuan and 590 million yuan respectively, and the current share price will be 11 times of the 2019 PE. The company is mainly based on hydropower, landscape and other clean energy units, wind power, photovoltaic business online conditions continue to improve, profitability will be further enhanced. Considering the fluctuation of the company's hydropower performance affected by the incoming water, a certain valuation discount is given to the company, which is 1.2x PB (LF) and 5.29RMB / share corresponding to the reasonable value, and the company is given an "overweight" rating.
Risk tips: water fluctuation in the upstream of hydropower; increase in the proportion of abandoning wind and light; reduction of grid electricity price.
