Event

Shenzhen Energy released an interim report in 2022 that from January to June 2022, the operating income was 16.284 billion yuan, up 18.81% from the same period last year; the gross profit was 2.873 billion yuan, down 21.24% from the same period last year; the operating profit was 1.421 billion yuan, down 41.95% from the same period last year; the net profit attributed to the parent company was 1.074 billion yuan, down 45.23% from the same period last year.

Comment

Affected by the sharp rise in coal prices, the company's medium-term gross profit margin for coal-fired power generation is still negative, but there is a significant improvement compared with the end of 2021.

From January to June 2022, the operating income was 16.284 billion yuan, up 18.81% from the same period last year; the gross profit was 2.873 billion yuan, down 21.24% from the same period last year; the operating profit was 1.421 billion yuan, down 41.95% from the same period last year; and the net profit attributed to the parent company was 1.074 billion yuan, down 45.23% from the same period last year. The company achieved a comprehensive gross profit margin of 17.64%, 9.86% lower than in mid-2021 and 1.42% lower than in the first quarter of 2022.

The company's coal-fired power generation business achieved a gross profit margin of-4.12% in mid-2022, an increase of 5.68 percentage points compared with the end of 2021.

In the second quarter of 2022, the company realized operating income of 8.517 billion yuan, an increase of 9.34% over the same period last year, a gross profit of 1.392 billion yuan, a decrease of 34.74% over the same period last year, and a net profit of 579 million yuan belonging to the parent company, a decrease of 60.67% over the same period last year. The company achieved a comprehensive gross profit margin of 16.34%, down 11.86% from the second quarter of 2021 and 2.71% from the first quarter of 2022.

The company anchors the green and low-carbon development route, continues to speed up the development of low-carbon energy business, and actively promotes the conversion of growth kinetic energy in the first half of 2022. In the first half of 2022, the company achieved wind power revenue of 1.702 billion yuan, an increase of 44.41% over the same period last year, contributing 1.095 billion yuan to gross profit and 64.30% gross profit margin of wind power business. The total number of new energy approval and filing projects is 168.9MW, including Shenzhen Energy Ruoqiang Qiman 100MW wind power project, Bruzhai 52.8MW wind power project in Pig Farm Township, Nayong County, 4.25MW roof distributed photovoltaic project in Shenneng Shengteng Science and Technology Industrial Park, Huizhou Deep Energy Harbor 6MW distributed photovoltaic project, Korla Shenzhen energy green hydrogen storage and addition integrated demonstration project distributed offline photovoltaic 5.85MW.

In the future, the company will further speed up the layout of the new energy market, actively expand the scope of business, and change the momentum of growth. On the one hand, we should seize the new opportunities in the market, speed up the development of offshore wind power resources through multiple channels, and strive to build base-based and large-scale offshore wind power projects. We will seize the development opportunities of the "industrial supporting + large-scale new energy base" project in the northwest region, and promote the national layout and base development of new energy projects. Seize the opportunity of the promotion and application of distributed photovoltaic, and actively carry out pilot projects such as roof photovoltaic for public construction and roof photovoltaic development for industrial parks. On the other hand, actively explore the diversified and coordinated development path of projects, actively try land-based high-tower tubes and large-scale wind power projects, strive to explore cutting-edge technologies such as deep-sea floating wind power hydrogen production, and boldly explore the comprehensive utilization of resources in the reservoir area of hydropower station. study the integration of scenery and water and the transformation and construction of small-scale pumped storage.

Profit forecast

The company's interim report data are basically in line with our expectations, and we keep our profit forecast unchanged for the time being. We estimate that from 2022 to 2024, the company will achieve operating income of 356.00 yuan, 424.49 yuan and 50.655 billion yuan, and the net profit attributed to the parent company is 26.06,33.98 and 4.526 billion yuan. The total share capital is 4.757 billion shares, corresponding to EPS0.55, 0.71 and 0.95 yuan.

The main points of valuation are as follows: on August 23, 2022, the stock price is 6.73 yuan, corresponding to a market capitalization of 32 billion yuan, and the PE from 2022 to 2024 is about 12, 9 and 7 times. Driven by technology and capital, the company distributes the four international core businesses of clean power, eco-environmental protection, comprehensive gas and energy, and is positioned as a growing international integrated service provider of clean energy and eco-friendly cities. fully benefit from the national dual-carbon strategy and dual-zone strategy, we maintain the "overweight" rating.

Risk tips: coal price control, new energy expansion progress, low-carbon energy business expansion is lower than expected.