2020/21Q1 's homing net profit + 20max 397%, downgraded to "increase holdings"
Jingneng Electric Power announced its results on April 28: 20.1 billion yuan (year-on-year + 9.0%), 1.396 billion yuan (+ 2.5% year-on-year), lower than Huatai forecast (1.615 billion yuan); 21Q1 company revenue 5.6 billion yuan (year-on-year + 12%), home net profit 67 million yuan (year-on-year-86%). Thermal power projects under construction are progressing steadily, and power generation and heat supply are growing. A significant increase in coal prices in 2021 may be a drag on full-year earnings. By adjusting the profit forecast, it is estimated that the BPS for 21-23 will be 3.88 yuan for Universe, and the target price for the 2021 0.9x target PB, will be 3.49 yuan, downgraded to the "overweight" rating.
The growth of power generation and heating, and the steady progress of thermal power projects
The cumulative power generation of 2020/21Q1 is 740 trillion kilowatt-hours (11% compared with the same period last year), and the unit utilization hours in 2020 is 4742 hours (- 151hours compared with the same period last year), which is higher than the national average of 526hours.
At the end of 2020, the company has a holding installed capacity of 1673 million kilowatts (year-on-year + 2.49 million kilowatts), under construction of 4.31 million kilowatts, and rights and interests installed capacity of 1909 million kilowatts (year-on-year + 2.57 million kilowatts). To expand the heating area and enhance the heating capacity of thermoelectric units through technical transformation, 2020 company-to-enterprise heating area reached 160 million square meters (year-on-year + 27%), heat supply 6016 million gig coke (year-on-year + 29%). The progress of the project under construction by the company is progressing steadily according to the time node. Lv Lin Power Generation, Qinhuangdao Thermal Power # 2, Yichun Thermal Power and Huizhou Thermal Power # 1 will be put into production as planned in 2020, and Huizhou Thermal Power # 2 is expected to be put into production in 2021 (2020 Annual report).
It has the relative advantage of cost, but the rising coal price may be a drag on profitability. Most of the new units of the company are large thermal power units and cogeneration units, with sufficient equipment output, and the average coal consumption and plant power consumption are in the leading level in the industry. The company mainly takes the Kengkou power station, and about 80% of the installed capacity (2020 annual report) is located in the coal-rich area (Inner Mongolia / Ningxia / Shanxi), and the coal price has a cost advantage. According to Wind data, from January to March 2021, the average market price of Qinhuangdao thermal coal Q5500 rose 32% to 745 yuan / ton compared with the same period last year, and we raised the average coal price forecast for 2021 from 550 yuan / ton to 610 yuan / ton.
We reduced the 21-22 gross profit margin of the power sector by 4.3% to 15.8%, and the investment income (mainly equity participation in thermal power companies) by 220.0% to 1.37 billion yuan.
Adjust profit forecast and target price
Increase the income of power and heat, and reduce the gross profit margin and investment income of thermal power. It is estimated that the company's operating income for 21-23 years will be RMB 229,000,000, with a net profit of RMB 229,000,000 and a net profit of RMB1.24 billion (previous value:
With the improvement of the company's asset-liability structure, 21Q1 completed the repurchase plan, and it is estimated that the BPS will be 3.88 pounds 3.96 pounds 4.05 yuan (previous value: 3.75 pounds 3.87 pounds). The EPS is 0.16 hundred million yuan, and the company's asset-liability structure is improved, and 21Q1 completes the repurchase plan, and the BPS is estimated to be 3.88 pounds 3.96 pounds. The 21-year average PB of the thermal power comparable company is 0.89x (Wind consensus expectation), and the 21-year target PB 0.9x is given to the company, corresponding to the target price of 3.49 yuan (the previous value is 4.00 yuan). Focus on the upward risk of coal prices, profitability under pressure, downgraded to "overweight" rating.
Risk hint: the increase in coal price is higher than expected, the number of hours of utilization is declining, and the risk of electricity price decline.