Wind power generation in October 2020 increased by 37.05% year-on-year, exceeding expectations:
In October 2020, the company's equity electricity generation totaled 469.93 GWh, up 31.47% from a year earlier.
Among them, wind power generation increased by 37.05% compared with the same period last year, while solar power generation decreased by 12.15% year-on-year.
The cumulative power generation in the first 10 months of 2020 was 3852.18 GWh, up 7.2% from the same period last year, with wind power up 9.12% and solar power 7.32% lower than the same period last year.
Continue to implement the "asset swap" strategy to improve asset quality and cash flow:
Recently, the company announced that it intends to sell Yunnan photovoltaic 100MW project to realize 175 million yuan. According to the preliminary calculation, although the sale of PB in this power plant project is only about 0.83 times, it is still significantly higher than the company's current 0.56 times PB level. The company will sell power stations that rely on electricity subsidies, and the funds obtained will help the company to develop new affordable projects, and the company will further reduce its dependence on subsidies in the future.
When the state begins to solve the problem of subsidy arrears, operators will usher in a revaluation:
On October 20, 2020, the three ministries jointly issued the new policy of "rational use of hours", which determined the total amount of funds subsidized by the central government for renewable energy power generation projects, thus "confirming the rights and interests" of project subsidies; at the same time, it is clear that the decoupling of subsidies and green cards creates conditions for green power trading. Following the new policy of "rational use of hours", the Ministry of Ecology and Environment has recently solicited opinions on the construction of a national carbon emissions trading market. We believe that the intensive introduction of relevant national subsidy policies shows the determination of various ministries and commissions to solve the problem of subsidy arrears, and the solution is gradually becoming clear, and it is expected that after the problem of subsidy arrears is resolved, it will significantly improve the cash flow of wind power / photovoltaic operators, and the revaluation of operators is worth looking forward to.
Maintain the buy rating and raise the target price to HK $0.53:
At present, the company's PE in 2020 is about 5.10 times, PB is about 0.56 times, and the dividend yield is about 5.75%, which is still in a high margin of safety. We update the company's profit forecast and take into account the valuation of comparable companies in the industry, raising the company's target price to HK $0.53, which is equivalent to 5.5x PE and 0.7x PB in 2021. There is room for a 22% increase in the target price compared to the current price, maintaining the buy rating.