2Q20 returns home net profit + 211%, maintaining "buy" rating
1H20 realized revenue / return net profit / deduction of non-return net profit of 2.55 billion yuan, which decreased by 25%, 48%, and decreased by 25%, 48%, and 2Q20, respectively, to achieve revenue / return net profit / deduction of non-return net profit of 1.33 trillion, with a year-on-year change of-2%, 211%, 317%, and the impact of the epidemic was weakened. Taking into account the comprehensive impact of the rebound in electricity generation, downward electricity price and cost improvement in the second half of the year, the 20-22 net profit forecast for return to the mother is 4.7 billion yuan, and the BPS 4.0 pound is 4.5 million yuan, giving the 21-year 1.1x target PB, with a target price of 5 yuan per share, maintaining the "buy" rating.
Electricity: the impact of the epidemic gradually fades, and 2H20 power generation is expected to increase positively.
1H20 Company completed 6.68 billion kWh / yoy-24%, resulting in a profit reduction of 240 million yuan due to the decline in power generation, which was the main reason for the decline in operating profit. Affected by the epidemic, the electricity consumption / generation of the whole society in 1H20 Hubei Province decreased by 11% and 8% respectively compared with the same period last year (Changyuan Electric Power 20 mid-year report disclosed), coupled with the better hydropower and water conditions, further suppressing the room for thermal power output. As the impact of the epidemic gradually recedes and economic activity in Hubei Province recovers, 2Q's electricity generation / sales both increased by 1.7% year-on-year, and we expect 2H20's electricity generation to maintain year-on-year growth.
Cost: downside of coal price hedging electricity is bad, supply improvement brings long-term benefit.
The unit price of comprehensive standard coal of 1H20 Company is 685.9 yuan / ton / yoy-8%, and the profit is increased by 120 million yuan due to the decrease of coal price. The increase in coal prices has slowed down, with the average spot price of Q5500 in Qingang from June to July and the beginning of August to 557, 580 and 556 yuan / ton. In the long run, the situation of sustained loose coal supply will not change, and under the action of factors such as hot weather and demand recovery after the epidemic slows down, there may be a phased tight supply. Haoji Railway ensures the supply of coal in central China. With the improvement of supporting coal sources and collection and distribution facilities along the line, the potential of transport capacity is gradually released. We believe that the long-term trend of coal cost reduction will not change.
Electricity price: increase the profit and market rate, and increase the downward pressure of electricity price.
1H20 reduced its profit by 40 million yuan due to the drop in the average price of electricity sold. The online electricity of the company will be settled according to the general electricity in the first half of the year, the government approved electricity price / thermal power benchmark electricity price will be implemented, and the electricity will be settled according to the transaction contract after the market transaction agreement is signed in the second half of the year. The average profit of 1H20 trading electricity in Hubei Province is less than 1.2 points, which is about 0.8 points in 1919 (Changyuan Electric Power IR file 20200709). The company disclosed that the profit margin is in the average level of Hubei Province. Affected by the expansion of direct transaction scale, increased competition and changes in transaction price model, the company expects that the market rate of thermal power in 20 years will increase compared with the same period last year, and the downward pressure on market transaction price will increase.
Downgrade earnings forecast and maintain "buy" rating
Taking into account the comprehensive impact of the rebound in electricity generation, electricity price decline and cost improvement in the second half of the year, the 20-22 return net profit is estimated to be 4.7 billion yuan (the previous value is 50.1 billion yuan), and the return rights and interests to 45-49-54 billion yuan (the previous value is 47-52-57 billion yuan), corresponding to the BPS of 4.5 billion yuan (4.75.1 yuan). With reference to the comparable company's 21-year Pamp B average 0.9x (Wind consensus expectation), and considering the considerable elasticity of the company's coal price profit, the company is given a 21-year 1.1x target PB with a target price of 5 yuan per share (the previous value is 4.65-5.08 yuan per share) and maintain a "buy" rating.
Risk tips: coal prices rose sharply; electricity prices adjusted sharply; power recovery was not as good as expected.
