This article comes from the research report of Northeast Securities, "can the linkage of coal and electricity solve the urgent need of electric combustion of" coal "? The writer is Gong Siwen, a securities analyst.
At present, the price of thermal coal has been running at a high level for a long time, while coal and power enterprises are limited by the industry pattern of "market coal planning electricity", the profits have dropped significantly, and the overall operation is more difficult. At the current time, whether the new version of coal-power linkage can be launched as scheduled in 2018 will have a significant impact on the future profitability of the thermal power industry. Zhitong Financial APP learned that Northeast Securities combined with the current coal-power linkage model forecast data and provincial thermal power fundamental research, to analyze and look forward to the operation of thermal power industry in 2018.
The Historical Evolution of Coal-Power Linkage and the current Management situation of Thermal Power Enterprises
From the history of electricity price adjustment and coal-power linkage policy over the years, the on-grid electricity price of coal-fired units in China has been adjusted a total of 14 times since 2004, of which nine times have been raised and five times lowered, and the national average electricity price has been raised to a maximum of 2.6 cents per kilowatt-hour. The maximum reduction is-3 minutes / kWh. On the whole, when the on-grid electricity price of coal power is adjusted, the non-residential electricity sales price will generally be adjusted in the same direction, and the adjustment range is often related to the change of on-grid electricity price and the current economic situation.
The only special thing is the electricity price adjustment in July 2017. The space for the electricity price adjustment comes from the cancellation of the special funds for structural adjustment of industrial enterprises levied from power generation enterprises, and the reduction of the collection standards of the national major water conservancy project construction fund and the late support fund for large and medium-sized reservoir resettlement by 25% each. At the same time, combined with the release of power transmission and distribution reform dividends to the upstream and downstream, it is realized for the first time to reduce the sales electricity price while raising the coal-fired benchmark electricity price.
Combined with the six times of coal-power linkage in history and the changes of thermal coal prices, there is a certain lag in the coal-power linkage policy. The current thermal coal price is similar to that in the first quarter of 2008, while the average electricity price is slightly higher. However, from the financial indicator of the net rate of sales, the current net interest rate of CS thermal power sales is only 4.76%, which is not much different from the 3.56% in the first quarter of 2008. Except for the extreme situation in the second half of 2008, this data already belongs to the low level of thermal power plate history. From the perspective of the healthy development of the industry, combined with the historical data of the thermal power industry, Northeast Securities believes that it is a more reasonable level for the thermal power sector to maintain a stable net profit margin of about 10%.
Judging from the average feed-in price of thermal power in the six major power grids recently, although the average feed-in price of thermal power in each power grid has increased after the price adjustment in July, there is still a big gap compared with the level in September 2014. Among them, the difference in Central China Power Grid is the largest, reaching 4.5 minutes / kWh, while the difference in Northwest Power Grid is the smallest, only 2.3 minutes / kWh, and the difference in other areas is about 2.5 minutes / kWh to 4 minutes / kWh. From the perspective of coal cost, the average price of 5500 kcal thermal coal around the Bohai Sea in 2014 is 522.33 yuan / ton, and the national average thermal coal price index is 444.44 yuan / ton. The price of 5500 kcal thermal coal in Qinhuangdao is 585 yuan / ton on October 11, 2107, and the national thermal coal price index is 493.26 yuan / ton in July, which is more than 500 yuan / ton in the whole year.At present, the level of coal price is significantly higher than that in 2014, but the electricity price is seriously upside down, so it is imperative to raise the electricity price.
According to statistics over the years, the growth rate of national installed capacity of 6000 kilowatts and power plants remained basically stable from 2008 to 2015, reaching 10.41% in 2015. Since then, the growth rate of national installed capacity has slowed significantly. The growth rate in 2016 fell 1.19 percentage points from 2015 to 9.23%, and the growth rate in the first half of 2017 dropped to 6.84%, the lowest in history. Over the past decade, the growth rate of national thermal power installed capacity has been slightly lower than that of total installed capacity, but the two trends are roughly similar. after thermal power installed capacity growth reached 7.84% in 2015, the highest growth rate since 2012, the growth rate dropped to 6.43% in 2016 and even lower to 4.42% in the first half of 2017. In the context of the current imbalance between power supply and demand and coal power has been included in the capacity removal industry, thermal power installation may maintain low-speed growth for a long time.
The growth rate of thermal power generation across the country has fluctuated greatly in recent years. Due to the low hydropower generation and the low base in the same period last year, the year-on-year growth rate of thermal power in 2014 was as high as 11.32%. Since then, the growth rate of thermal power has declined year by year from 2013 to 2015, to-3.22% in 2015. The growth rate began to pick up in 2016, and the growth rate of thermal power generation reached 7.95% in the first half of 2017, exceeding the growth rate of electricity consumption of the whole society for the first time in the past three years.
Although the growth rate of thermal power generation in the first half of 2017 reached the highest since 2014, the performance of power sector companies declined significantly due to the large year-on-year increase in coal prices in the first half of the year. In 28 Citic first-tier industries, CS power and utilities sector performance growth rate of-34.02%, ranking last, sub-industry CS thermal power sector performance growth rate of-65.38%.
Northeast Securities nearly three years of thermal power industry quarterly gross profit margin compared with Qinhuangdao thermal coal trend, it is obvious that when thermal coal prices rise, thermal power plate gross profit margin decreased significantly. In the current situation of high coal prices, if the feed-in electricity price is not further adjusted, the thermal power industry is limited by its own high asset-liability ratio and other adverse effects, it is difficult to get rid of the dilemma of "quantity increase and profit decrease".
On July 1, 2017, several provinces and cities raised feed-in electricity prices one after another, the largest increase was in Henan Province, reaching 2.28 cents per kilowatt-hour, followed by 2.2 minutes per kilowatt-hour in Shandong Province. The increase in electricity price is expected to ease the cost pressure on thermal power enterprises, but it is still difficult to make up for the impact of rising coal prices on thermal power enterprises, and the increase in electricity price is far less than the previous reduction.
Prediction of coal-electricity linkage model
Calculation method and hypothesis
Calculation formula of linkage between benchmarking electricity price and coal price of coal-fired units:
Finally, the adjustment range of electricity price caused by coal-power linkage in the new cycle should be the current adjustment level minus the previous period price adjustment level.
After the coal-electricity linkage leads to the adjustment of coal-fired benchmarking electricity price, each province needs to adjust the sales electricity price accordingly. The electricity prices for residents' living and agricultural production remain relatively stable, and the industrial and commercial electricity prices are adjusted according to the corresponding calculation formula:
Combined with the relevant formulas and the current thermal coal price level, Northeast Securities makes the following assumptions about the relevant conditions for calculation: 1. It is expected that the Bohai Rim thermal coal price index will enter a green range in October 2017. the average thermal coal price index in the cycle from November 2016 to October 2017 is 507.61 yuan / ton. 2. The provincial thermal coal price index is determined according to its ratio to the national thermal coal price index. 3. Assume that the national average power supply coal consumption is 315 g / kWh, a decrease of 4 g / kWh compared with 2016; the provincial power supply coal consumption is determined according to the latest monthly data released by the China Power Union. For provinces such as Tianjin, Shanghai, Jiangsu, Zhejiang and Guangdong, which are greatly affected by the conversion of natural gas power generation, power supply coal consumption is adjusted according to the data of local benchmarking power generation enterprises.
Prediction result analysis
In terms of the expected increase in electricity prices in 2018, Hunan, southern Hebei and Hubei ranked in the top three, while Heilongjiang, Mengdong and Xinjiang ranked in the bottom three. According to the model of Northeast Securities, the national average increase is 4.45 minutes / kWh, a large increase. Among the major thermal power provinces, provinces such as Guangdong, Shandong and Jiangsu are expected to rise higher than the national average, while provinces such as Inner Mongolia and Xinjiang are expected to rise lower than the national average. For the sake of caution and rationality, the extent of the increase in electricity prices in July has been subtracted from the current calculation results, and the performance of thermal power enterprises is measured on this basis.
Measurement of performance elasticity of relevant power companies
Assuming that the discount range of the market-oriented electricity price of each company remains the same, and the electricity price increase is based on an optimistic estimate of an average of 4.45 cents per kilowatt-hour, the provinces that raised the coal-fired benchmark grid electricity price in July 2017 deducted some of the increase in 2018.
The increase of electricity price has a significant impact on the net profit of power enterprises. Huaneng International, for example, is expected to increase its 2018 net profit by 8.373 billion yuan, accounting for 77.62 per cent of its 2016 net profit. In the first half of 2017, its revenue was 71.434 billion yuan and its net profit was 1.037 billion yuan. If the electricity price is raised sufficiently as scheduled, its profitability is expected to return to the 2016 level. In fact, considering that most of the listed power companies have shares in thermal power plants in the relevant areas, coal-power linkage will also greatly improve their investment income, which will have a more far-reaching impact on the performance of thermal power enterprises.
Risk discussion: policy risk and market electricity double impact
Although according to the relevant formula of coal-power linkage, Northeast Securities expects the coal-electricity benchmarking electricity price to be increased by 4.45 cents per kilowatt-hour in 2108, but under the current pattern of "market coal planning electricity", the electricity price increase is still greatly affected by national policies.
In the case of the current supply-side reform, coal has the advantage of resources to obtain pricing power and trading power. On the other hand, it is difficult for coal and power enterprises to negotiate the price with the coal side, and the downstream electricity price is also strictly controlled, so it is difficult to effectively ease the pressure of rising costs. In the current situation that "three to one, one decline and one supplement" is still the main theme of the industry, the rise in electricity prices brought about by the linkage of coal and power may have an impact on downstream manufacturing production, thus affecting the country's determination to raise coal prices.
China's coal power generation capacity for the whole year of 2016 is 3.9058 trillion kilowatt-hours, and the power consumption rate of 7 percent is considered to be 3.6324 trillion kilowatt-hours. If the kilowatt-hour increase is calculated by 4.45 cents per kilowatt-hour, it corresponds to an increase of 161.6 billion yuan in electricity charges. Even if we consider that there is 30% of the market electricity space in 2018, the market electricity part will not be affected by the price adjustment, and the corresponding electricity tariff will increase by 113.1 billion yuan.
Based on the electricity consumption data in 2016, the electricity consumption of the whole society is 5.9198 trillion kilowatt-hours in 2016, that of residents is 805.4 billion kilowatt-hours, and that of coal-fired power grid is estimated to be 3.6324 trillion kilowatt-hours. Considering that kilowatt-hour electricity rose by 4.45 points, the corresponding increase in industrial electricity prices is about 8.58%. By fitting the historical macro data, we come to the conclusion that the price of the power industry accounts for 6.5% of the weight of PPI, corresponding to an increase of 0.58% of PPI.
In several previous coal-power linkage cycles, although they met the requirements of coal-power linkage to raise electricity prices, they rarely or even did not adjust electricity prices for reasons such as macroeconomic regulation and control. At the same time, considering that the proportion of market-oriented electricity is bound to further increase in 2018, the bargaining power of power enterprises is relatively weak under the current pattern of power supply exceeding demand.
Based on the above judgment, Northeast Securities gives the performance changes of thermal power enterprises under the influence of neutral assumptions, that is, the national thermal power benchmark electricity price is affected by coal-power linkage and macro-control, rising by 3 points per kilowatt-hour (to make up for the decline in 2016); the corresponding price adjustment of each province is converted; assuming that there is 30% market electricity, and the market electricity price does not increase, it is equivalent to a 70% increase in electricity price to 2.1 points.
Under the neutral assumption, Northeast Securities judges that the rise in electricity prices corresponds to a rise in PPI by 0.27%, which has a relatively small impact, and there should be little resistance to the implementation of this plan.
Study on the fundamentals of provincial thermal power
For the thermal power industry, electricity price is of course an important factor affecting its revenue and performance. However, from the perspective of its fundamental analysis logic, the use of hours and installed capacity affects the amount of electricity on the grid, and the coal price and power supply coal consumption affect the cost level of kilowatt-hour electricity, which also has a significant impact on the operation of thermal power enterprises. At present, the power supply exceeds demand, and if the new installed capacity grows further, it will dilute the utilization hours of the existing installed capacity. Fortunately, with the introduction of a series of national policies to eliminate coal-fired power excess capacity, the installed capacity of thermal power in China grew by 5.21% from January to August 2017, down 2.5 percentage points. Hundreds of millions of kilowatts of units under construction have been suspended and delayed, greatly relieving the pressure on existing thermal power units.
Although China's electric power industry as a whole is in a state of oversupply and difficult operation, due to the vast territory of our country, there are great differences in economic development level, power installation and transmission channels among different provinces. the situation of power supply and demand, electricity price and coal price are also different in different provinces.
After comparing the coal-fired installation structure of major listed power companies, we can see that local energy enterprises benefit from the smaller installed scale and more new units, and the proportion of units above 600000 kilowatts is relatively high. Among the five major power generation, Datang Power Generation, Huaneng International and Huadian International accounted for 65.15%, 54.34% and 50.75% of units above 600000 kilowatts respectively.
Huaneng International installed capacity is scattered, accounting for 26.78%, 25.59% and 21.56% respectively in North China, East China and Central China Power Grid. Huadian International accounts for a relatively high proportion in North China, accounting for 46.42% of its thermal power installed, while Central and East China account for 23.75% and 18.83%, respectively. Datang power generation accounts for a relatively high proportion in North China Power Grid, accounting for 50.89% of its thermal power installation. This was followed by East China and Southern Power Grid, which were 24.75% and 11.85%, respectively.
Judging from the average price index of thermal coal from January to August this year, Guangxi, Jiangxi and Hunan ranked high in absolute value, while Gansu, Shanxi, Ningxia and other provinces all rose more than 70% year on year, ranking at the top. It is also much higher than the national thermal coal price increase of 54.6% year-on-year. On the whole, the increase of coal prices in eastern Mongolia and Xinjiang is generally low, and thermal power units are less affected by the rise in fuel costs.
From the perspective of utilization rate, the average utilization hour of thermal power in the country from January to August 2017 was 2793 hours, an increase of 2.42% over the same period last year. Jiangsu, Hebei and Ningxia ranked top in absolute value, while Hunan, Jiangxi and Hubei had year-on-year growth rates. From January to August 2017, the national thermal power generation increased by 7.2% compared with the same period last year, and the provinces with the highest year-on-year growth rates were Qinghai, Ningxia and Hunan, mainly due to their low thermal power base. From the data of power consumption gap and absolute value growth in various provinces from January to August, the power consumption gap in Zhejiang, Jiangsu and Shandong has increased greatly compared with the same period last year, that is, the supply and demand situation in the relevant areas is relatively improved, and the installed operation in the region is better. Generally speaking, the utilization of thermal power in East China and North China and the power supply and demand in the region are better.
Northeast Securities introduces the concepts of ignition spread and marginal profit for analysis. According to the comprehensive analysis, the thermal power units in North China and East China have higher marginal profit of installation, and the thermal power enterprises with concentrated installation in this area are more beneficial. Among the five major power generation, Northeast Securities judged that Datang Power Generation and Huaneng International benefited from the distribution of installed capacity.
Recommended target for thermal power plate
Considering the recovery of gross profit margin and the growth of investment income brought about by coal-power linkage in 2018, Northeast Securities recommends the national thermal power leader in terms of profit improvement, installed structure quality, installed distribution advantage and coal-power linkage elasticity.Huaneng International (00902)。
Huaneng International as the largest thermal power listing platform in China, after the asset injection, the current controllable installation has reached 101.698 million kilowatts, the leading position of thermal power is becoming more and more stable. At the current point, the rise in coal prices has significantly lowered the company's gross profit margin, which was only 11.49% in the first half, down about 17 percentage points from the same period last year. The high operating coal price makes it difficult for the company's economies of scale to be brought into full play, but if the impact of future electricity price increases is further considered, the company's profitability will be significantly improved.
If considered according to the neutral hypothesis, the coal-power linkage in 2018 is expected to bring the company a net profit growth of 2.671 billion yuan, equivalent to 2.58 times the net profit of 1.037 billion yuan in the first half of 2017. Under the influence of such factors as the asymptotic expectation of coal-power linkage, the pick-up of power consumption, the year-on-year recovery of thermal power utilization hours across the country, and the national policy to promote the release of advanced thermal coal production capacity, the company, as the leader of thermal power, may further benefit from the recovery of the industry. performance is expected to rebound and improve.
In addition, the restructuring of central power enterprises has gradually entered the most exciting part. Huaneng International, as the potential target of the restructuring of central enterprises, has a high probability to benefit from the industrial chain integration and scale effect brought by the reorganization. (editor: Hu Min)