This report is read as follows:
It is estimated that the scale of new power generation will be 60.8,64.5 and 70MW in 2020-22, the annual return profit of electricity sales will be increased by 0.8-120 million, the net return profit in 2020-22 will be raised to 2.62 388 trillion yuan, and the target price will be raised to 30.83 yuan.
Main points of investment:
Conclusion: the full subscription of 1.5 billion yuan by major shareholders shows confidence, the cash flow of the first and second phase of the power station ensures smooth financing and sustainable development, and there is a huge space for the self-operation of Kaishan geothermal power station and the total contract of EPC. Based on the new power generation scale, the EPS in 2020-22 is increased to 0.31 (+ 0.03,0.45) and 0.61 (+ 0.10) yuan, and the target price is raised to 30.83 yuan based on FCFF and partial valuation methods, corresponding to 99.45 times of the dynamic PE in 2020.
It is expected to increase the annual installed capacity by 60-70MW and increase the annual return profit of electricity sales by 0.8-120 million. It is estimated that the annual electricity sales revenue of the first phase of the 45MW project is about 30 million US dollars, the net interest rate is about 50%, and the internal rate of return is expected to exceed 13%. The construction reserve resources of Kaishan geothermal power station exceed 500MW, and it is expected to increase 60-70MW, 200-300 million annual electricity sales revenue and 0.8-120 million home profit in 2020-25.
The wellhead module power station is a great success, and sustainable financing is guaranteed. Compared with the central power station, the screw expansion wellhead module power station has less initial investment and lower risk, and the construction and power generation can be completed in 18-24 months, creating a sustainable model with the early income as the later input. The major shareholders fully subscribed for 1.5 billion increase for the second phase of 45MW to be put into production. The first phase of the operation has been approved by the AIIB. It is estimated that the first and second phases will generate US $50 million in EBITDA, which can cover debt repayment and guarantee sustainable investment.
The threshold for investment in geothermal power stations has been lowered, and there is a huge space for self-operation and EPC. Global geothermal power generation installation is about 15GW, the annual new scale 0.5GW, Kaishan wellhead module power station greatly reduces the investment threshold and risk, it is expected that the new installation is expected to enter the rising period. Looking to the future, the scale of Kaishan's own wellhead power station is expected to reach GW level, while vigorously expanding the construction of third-party power stations and the supply of core equipment. At present, a number of power plant EPC orders have been signed, with a cumulative amount of nearly 100 million US dollars, and a considerable profit margin.
Risk tips: repeated overseas outbreaks have led to delays in the development of power plants; follow-up financing is not up to expectations.
