Jin Control Group is listed on the platform, mainly engaged in power generation, distribution and coal business. Tongbao Energy is one of the next three major listing platforms of Jin Control Group. Since 1998, it has begun to transform to the power industry. In 1999, it completed the divestiture of its non-power assets. It now has wholly-owned subsidiaries Shanxi Sunshine Power Generation and Shanxi Local Power. Shares in Shanxi Ningwu Yushupo coal industry (23%), forming the three main industries of power distribution, power generation and coal.
2023H1 revenue has grown steadily, and the profit margin of the distribution business has declined. In the first half of 2023, the operating income / return net profit of the company was 5.485,396 million yuan respectively, which was + 1.97% and 13.28% respectively compared with the same period last year; and the gross profit margin / return net profit rate was 10.60% and 7.22% respectively, respectively compared with the same period last year-1.87pct/-1.27pct. Itemized, 2023H1 power generation business realized revenue of 872 million yuan (YOY-10.03%) and net profit of 39 million yuan (YOY+79.36%); distribution business realized revenue of 4.613 billion yuan (YOY+4.61%) and net profit of 242 million yuan (YOY-23.06%); and coal business earned 118 million yuan (YOY-5.15%) based on equity method.
Electricity generation and online electricity continue to grow, and the price of online electricity has declined. By June 30, 2023, the company had completed 2.896 billion kilowatt-hours of electricity generation, an increase of 7.26 percent; electricity consumption of 2.629 billion kilowatt hours, an increase of 7.31 percent, and an average price of 336.20 yuan per kilowatt-hour (including tax), a decrease of 16.69 percent. In the second quarter of 2023, the company completed 1.521 billion kilowatt-hours of electricity generation, an increase of 24.02 percent; and online electricity consumption of 1.388 billion kilowatt hours, an increase of 24.59 percent. The average price of grid electricity (including tax) was 322.49 yuan per kilowatt hour, down 21.42 percent. Compared with the first quarter, electricity generation and grid electricity increased rapidly in the summer peak, but grid electricity prices declined further.
Green transformation and upgrading will be accelerated to create a platform for asset listing. The company plans to inject Lande into Lande in advance to transform its equipment manufacturing business, but the high-end equipment manufacturing industry is still in its infancy, so it is difficult to inject into listed companies in the short term, so it is timely to adjust its strategic positioning and terminate the acquisition of equity in equipment assets. promote the development of green and low-carbon transformation. At present, a variety of new Wanrong 150MW composite photovoltaic projects and original 150MW ground photovoltaic projects have been documented by the government and are going through the examination and approval procedures such as the establishment of state-funded projects. At the same time, Jinneng holding Group supports the company as its "clean energy" capital operation listing platform to comprehensively plan the group's clean energy asset securitization. In the field of clean energy, the Group has operating assets of about 6 million kilowatts, mainly Scenic Power assets in Shanxi Province.
Profit forecast: we estimate that the company's operating income from 2023 to 2025 will be 112.22 billion yuan, respectively, and its net profit will be 8.88 billion yuan, 939 million and 999 million, respectively, and the corresponding PE will be 11.93x/11.27x/10.59x, maintaining the "buy" rating.
Risk hint: the domestic and foreign macro situation changes more than expected, the company's power generation and distribution business income falls short of expectations, the change of coal investment income exceeds expectations, the injection process of clean energy industry is less than expected, and the profit forecast and valuation model is not as expected.