Events:
The company publishes its 2020 annual report. In 2020, the revenue reached 17.023 billion yuan, an increase of 7.67% over the same period last year, and the net profit returned to the home was 2.457 billion yuan, an increase of 63.97% over the same period last year, which is in line with our expectations.
The company releases its quarterly report for 2021. 2021Q1 achieved revenue of 5.075 billion, an increase of 37.26% over the same period last year, and a net profit of 677 million yuan, an increase of 49.37% over the same period last year, in line with our expectations.
Main points of investment:
Since 2020, the water historic partial abundant superimposed unit has been put into operation, and the profit of hydropower has increased greatly. After two consecutive years of dry water in 2018 and 2019, the Qingjiang River basin where the company's hydropower units are located ushered in a historic water harvest year in 2020, with hydropower generation of 13.233 billion kilowatt hours, an increase of 102.19 percent over the same period last year, reaching an all-time high. In addition, the company's two Jiangping River hydropower units completed 72-hour full-load trial operation on July 28 and August 3 this year, respectively. After the company was put into operation, the installed scale of hydropower reached about 4.6 million kilowatts, an increase of 10.8 percent over the same period last year. Under various influences, Qingjiang Company, a wholly owned subsidiary of the company, achieved a net profit of 1.265 billion yuan in 2020, compared with 338 million yuan in the same period in 2019.
Abundant water supply continued to the first quarter of 2021, supporting the company's performance to continue to repair. The trend of improving water supply continued to the first quarter of 2021, when the company's 2021Q1 achieved 2.999 billion kilowatt-hours of hydropower generation, an increase of 24.57% over the same period last year, supporting the company's continued performance repair. It is worth emphasizing that the growth rate was achieved under high base conditions, and the epidemic did not affect the company's hydropower generation in the first half of 2020, and on the contrary, thanks to the improvement in incoming water, the company's 2020Q1 hydropower generation has increased by 63.89% compared with the same period in 2019.
Two million kilowatt thermal power plants in Xiangyang were invested to carry out preliminary research on pumped storage power stations. The company announced in February 2021 to invest in the construction of 2 million kilowatt thermal power plants in Xiangyang (Yicheng), with a dynamic investment of 7.73 billion yuan. The project is the intersection power plant where the Hao-Ji Railway enters the first station in Hubei, and the coal transportation conditions are superior, which can effectively reduce the fuel cost; coupled with the higher parameters of the project 2 million units, it can be used as the main power load support in Hubei Province, and the profitability is expected to be considerable. In addition, the company announced the signing of Hubei Songzi, Hubei Nanzhang pumped storage power station project cooperation framework agreement to promote the preliminary work of the project. With the rapid increase in the proportion of new energy installed in China, the peak regulation and energy storage pressure of the power grid is rising in a straight line. It is emphasized to speed up the construction of pumped storage in the 14th five-year Plan. Recently, the State Energy Administration and the State Grid have made intensive efforts to promote peak regulation and energy storage cost transmission, and pumped storage power stations are expected to make stable profits through capacity electricity prices.
Profit forecast and rating: taking into account the recent sharp rise in coal prices, we slightly downgrade the company's 2021-2022 homing net profit forecast of 25.31 yuan and 2.733 billion yuan respectively (before the adjustment is 27.79 yuan, 3.142 billion yuan respectively), the new 2023 homing net profit is 3.045 billion yuan, the current stock price corresponding to PE is 12, 11, 10 times, respectively, to maintain the "buy" rating.