Main points of investment
Mid-2019 profit of 399 million yuan, an increase of 44.8% over the same period last year:
In the first half of 2019, the company achieved revenue of 963 million yuan, up 19% from the same period last year; gross profit of 625 million yuan, up 35.4% from the same period last year; profit attributable to equity holders of the company was 399 million yuan, up 44.8% from the same period last year; and basic profit per share was 4.75%. No dividend is paid in the medium term. As of the end of June 2019, the company's net asset value was RMB 5.783 billion, with assets per share of RMB 0.68. The rapid growth of the company's profits is mainly due to the substantial increase in operating rights and installed capacity and power generation profits.
The generating capacity of wholly-owned wind farms increased significantly in the first half of the year:
The revenue and net profit of the company's wholly-owned power plant increased rapidly in the first half of 2019. The total income of the wholly-owned power plant was 886 million yuan, an increase of 41.3% over the same period last year, accounting for 92% of the company's total revenue and an increase of 14 percentage points over the same period last year. The net profit of wholly-owned power plants increased by 41.4% over the same period last year. During the period, the power generation of the company's wholly-owned wind power plant increased by 45.7% compared with the same period last year, of which the power generation of wholly-owned wind power plants increased by 52.7% compared with the same period last year. The weighted average available hours of wind power plants reached 1189 hours, of which the average available hours of wholly-owned wind power plants reached 1240 hours, significantly higher than the national average (1133 hours). During the period, the wind power restriction rate of the company was 3.9%, which was further improved compared with the same period last year, and better than the national average (4.7%).
The reserve of the project is sufficient, and the new production is expected to be about 500MW in 2019:
In the first half of 2019, the company signed a total of new wind resources 3682MW, new photovoltaic resources 868MW. The company has approved and entered the provincial construction plan, locked the total 895MW of the original electricity price wind power project according to the existing policy, and the rich resource reserve of the locked electricity price wind power project, which will ensure the company's sustainable growth in the future. In addition, in the list of the first batch of affordable wind power and photovoltaic projects issued by the National Development and Reform Commission and the Energy Administration in 2019, the company has a total of 7 projects (641MW) on the list, including 6 wind power (596MW) and 1 photovoltaic (45MW). The company will gradually build a number of profitable affordable projects and gradually get rid of the dependence on green power subsidies. At present, the company is building a total of 933MW, and it is expected that about 500MW will be put into production in 2019.
Give the holder a rating with a target price of HK $0.44:
We update the company's earnings forecast that the current stock price corresponds to 4.4x PE and 0.46x PB in 2019, with a dividend yield of about 7%. Combined with industry valuation and the company's earnings growth, we give the target price HK $0.44, which is equivalent to 5 times and 4.1 times PE in 2019 and 2020. The target price has 14% room to rise from the current price.