Medium-term net profit rose 44.8 per cent to 399 million yuan: in the first half of 2019, the company achieved revenue of 963 million yuan, an increase of 19 per cent over the same period last year; and net profit attributable to shareholders was 399 million yuan, up 44.8 per cent from the same period last year. Fully diluted earnings per share were 4.54 points, compared with 3.19 points in the same period last year.
The power generation of wholly-owned power plants increased significantly: in the first half of the year, the company's equity power generation increased by 29% year-on-year to 2403 gigawatt hours, of which the company's wholly-owned power plant increased significantly by 45.7% year-on-year to 1649.7 gigawatt hours. In the first half of the year, due to the operation of wholly-owned wind farms and the decline of southern wind resources compared with the same period last year, the company's wind power generation increased by 30.9%. The company's photovoltaic power generation increased by 16.2% compared with the same period last year (of which the generation of wholly-owned photovoltaic power plants increased by 16.7%); benefiting from the improvement of power restriction in the northern region, the company's joint venture equity power generation increased by 3.2% compared with the same period last year.
The utilization hours of sole proprietorship wind power plants decreased by 4.4% compared with the same period last year, and the abandonment rate was 2.1%: in the first half of the year, due to the decline in southern wind resources, the weighted average utilization hours of wind farms owned by the company were basically the same as the same period last year, at 1189 hours, higher than the national average (1133 hours); the utilization hours of wholly-owned wind farms decreased by 4.4% compared with the same period last year. The weighted average utilization hours of photovoltaic power plants with shareholdings were 813 hours, an increase of 14.5% over the same period last year. The average abandonment rate of wind power plants owned by the company is 3.9%, the power restriction rate of wholly-owned wind power plants is 2.1%, which is lower than the national average (4.7%), the average abandonment rate of equity photovoltaic power plants is 7.1%, and that of wholly-owned photovoltaic power plants is 7.8%.
Steady progress in power plant construction: by the end of mid-2019, the company's transportation rights and interests capacity reached 2205MW, accounting for 85.8% of wind power, including wholly-owned wind power project 1212MW and wholly-owned photovoltaic 303MW. The company has approved a total of 895MW for wind power projects with locked electricity prices. At the same time, the company is actively preparing affordable projects with strong profitability, and a total of 7 projects (641MW) are included in the list of the first affordable wind power and photovoltaic projects released by the National Development and Reform Commission and the Energy Bureau in 2019.
Maintain the target price HK$0.49 and reiterate the "buy" rating
The company's wind power has approved a rich reserve of projects, and the wholly-owned non-power-limited projects in the south have been gradually put into operation, while increasing the development of high-income parity projects in the north. It is estimated that the company's revenue CAGR and net profit attributable to shareholders in 2019-2021 will be 25% and 22% respectively, maintaining the target price of HK $0.49 and reiterating its "buy" rating. The company's dividend yield is 6%, and the current valuation is 4.4x2019 per annum.
Risk hint: the recovery of renewable energy subsidies is not as expected, and the improvement of power restriction rate is not as expected.