The company is the leader of the domestic screw air compressor industry, the use of screw host technology advantages of successful transformation of geothermal power generation operators, new business began to steadily contribute revenue. At present, the company has announced on hand geothermal power generation resources 370MW, in the operation of geothermal power generation scale 50.2MW, is the largest geothermal power generation operator in China. 45MW, the first phase of the company's Indonesia SMGP project, has been in stable operation for one year, and the company achieved a net profit of 194 million yuan in the first three quarters of 2020, an increase of 107% over the same period last year.
Geothermal power generation has large growth space and has the advantages of schedulability and cost. The global geothermal power generation scale 13.9GW in 2019 has a large growth space. At present, the company's geothermal power generation business has entered the world's major geothermal power generation market. As a dispatchable power generation mode, geothermal power generation has the advantage of being a basic power source compared with photovoltaic and wind power. According to EIA data, the LCOE / MWh,LCOE/LACE ratio of geothermal power generation is 37.47USD / 1.18.The investment value of geothermal power generation is the highest among all power generation modes.
The company's "wellhead modular" power station builds core technical barriers, and the deep coverage of the industrial chain highlights the cost leadership. The company's steam screw expander and ORC screw expander have independent intellectual property rights, and the "wellhead modular" power station based on the two products builds the company's core technical advantages, with the advantages of high thermal energy utilization and low cost. At present, the company achieves independent support in geothermal power plant EPC, power plant core equipment, drilling and other major cost terminals, and the company's deep coverage in the industrial chain promotes the company's cost advantage.
Compared with the leader in the field of ORC, the company's future growth can be expected. Compared with Ormat, the company has the characteristics of cost advantage and differentiation. The scale of SMGP project in Indonesia has exceeded the largest project scale of Ormat in operation, and the operational efficiency of the first phase is better than the average level of Ormat project in operation. The Indonesian project is running well and is expected to form a good demonstration effect, which is conducive to the further growth of the company's geothermal power generation orders.
Investment conclusion: it is estimated that the company's net return profit in 2020, 2021, and 2022 is 2.67 million, 449, 633 million yuan. The company's orders on hand can ensure the company's high growth in the next five years, and the success of the SMGP project in Indonesia makes it possible for the company to continue to expand its geothermal power generation scale in the future. Covered for the first time, given a "buy" rating, with a target price of 18.9 yuan.
Risk hints: geopolitical risks; overseas epidemics affect project progress; financing progress is not as expected
