The first phase of Tangshan LNG project was put into operation in June.
We recently participated in the company's Hebei Tangshan reverse roadshow, visited the Bodhi Island offshore wind farm, and attended the Tangshan LNG project production meeting. The first phase of Tangshan LNG project was put into operation in June. The whole project is located in Caofeidian Port Logistics Park, Tangshan City, Hebei Province, with an estimated total investment of 25.4 billion yuan (RMB, the same below), with a designed loading and unloading capacity of 1200 million tons per year, including 20 200,000 square LNG storage tanks and 2 LNG berths. The project is divided into three phases: (1) Phase 1 includes 4 LNG storage tanks and a 80-266,000 square LNG ship berth with a design loading and unloading capacity of 5 million tons / year; (2) Phase II includes 8 LNG storage tanks and one 1-266,000 square LNG ship berth with a design loading and unloading capacity of 5 million tons / year and is targeted to be put into operation in 2025; (3) Phase 3 includes eight LNG storage tanks and is expected to be put into operation by 2030.
The project mainly serves gas operators and large industrial users in Beijing-Tianjin-Hebei region. The first LNG ship from Qatar, carrying about 203, 000 square meters of LNG, also arrived at the first phase of the terminal on June 18 and completed its unloading and departure on the 23rd. The company aims to use 40-500000, 150-2 million and 3 million-3 million tons of projects in 2023-25, respectively. As the first phase has just been put into operation, we think that the profit of the project in 2023-24 is limited, but the profit can reach 180 million yuan in 2025. With the future operation of Phase II and Phase III, the project profit is expected to increase significantly.
Accelerated growth of wind power installed capacity in 2024-25
On the other hand, we believe that the company will be approved more wind power projects in the second half of the 14th five-year Plan. It is conservatively estimated that the new installed capacity in 2023-25 will be 400MW, 1000 MW and 1500 MW respectively. As a result, the cumulative total installed capacity increased by 6.9%, 16.1% and 20.8% over the same period last year to 6212, 7212 and 8712 megawatts (Note: 2.4% in 2022). Related wind power generation rose 5.2%, 17.0% and 22.0% year-on-year to 14767, 17282 and 21085 gigawatt hours.
Raise the target price to HK $5.03 and reiterate the "buy" rating
After combining the above factors, we raised the shareholder net profit forecast for 2023-25 by 0.1%, 6.0% and 21.7% to 2.57 billion, 3.09 billion and 3.91 billion yuan respectively, up 12.1%, 20.2% and 26.6% over the same period last year. Rolling to 6.0 times the 2024 target price-to-earnings ratio, we have raised the price of H shares from HK $4.88 to HK $5.03, corresponding to a rise of 78.5%. Reiterate the "buy" rating.
Risk tips: (1) the risk of accounts receivable, (2) the price of electricity connected to the grid has dropped sharply, and (3) the cost of natural gas has risen sharply.