Main points of investment
Electricity generation increased by 34.6% from January to June 2021 compared with the same period last year:
In June 2021, the company completed 1477.6 gigawatt hours of electricity generation according to the consolidated statement, an increase of 31.9% over the same period last year. Of this total, China's wind power projects increased by 67.4 percent, China's solar energy projects increased by 20.9 percent, China's coal-fired, cogeneration and gas projects increased by 37.8 percent, China's hydropower projects increased by 4.1 percent, and South Korean gas projects increased by 17.7 percent. In the first six months of 2021, the company completed a total of 9233.5 gigawatt hours of electricity generation, an increase of 34.6% over the same period in 2020. Of this total, China's wind power projects increased by 70.2%, China's solar energy projects increased by 24.5%, China's coal-fired, cogeneration and gas projects increased by 38.5%, China's hydropower projects decreased by 9.5%, and South Korean gas projects increased by 18.2%.
The company is expected to report good results in mid-2021:
Benefiting from good wind resources, wind power generation increased significantly in the first half of 2021. According to the National Bureau of Statistics, China's wind power generation increased by 26.6% from January to June 2021, an increase of 281.9 billion kilowatt-hours. The company's wind power generation grew by 70.2% in the first half of the year, much higher than the growth rate of the industry.
Benefiting from the high growth in electricity generation, we expect the company to perform well in the medium term.
National carbon trading is officially launched, benefiting new energy operators:
The national carbon emissions trading officially opened on the morning of July 16. On the first day of trading, the trading volume of the national carbon market carbon emissions quota, or CEA listing agreement, was 4.104 million tons, with a turnover of 210 million yuan, and the closing price was 51.23 yuan per ton, up 6.73 percent from the opening price. With the official opening of carbon trading, the national certification of voluntary emission reductions, or CCER, is expected to restart approval and trading. At the price of 50 yuan / ton CCER, wind power and photovoltaic projects are expected to benefit an additional 4.5min / kWh from CCER (calculated by the emission reduction factor of the average 0.8953tCO2/MWh). With the rise of CCER prices in the future, it is expected that the kilowatt-hour revenue of new energy operators will further increase.
Maintain the buy rating and raise the target price to HK $3.60:
We raised the company's target price to HK $3.60, which is equivalent to 10 times and 9 times PE in 2021 and 2022. The target price has 23% room to rise from the current price, and the buy rating is maintained.
Risk Tips:
Asset injection delay, new installation is not as expected, subsidy rebate lags behind