Events:
The company released its 2018 annual report: annual revenue was 2.568 billion yuan, an increase of 20.76% over the same period last year; net profit returned to its mother was 189 million yuan, an increase of 1045.91% per share, an increase of 850% over the same period last year. The company's high performance growth compared with the same period last year was mainly due to the good performance of ① 's power generation business in 18 years, and the over-net emission transformation of desulphurization, denitrification, dust and dust removal in accordance with the new environmental protection standards in ② in 17 years, and the original environmental protection equipment was disposed of, resulting in an one-time impairment, with a total non-operating expenditure of 172 million, which was a serious drag on 17 years' performance. The annual profit distribution plan of the company is 1.20 yuan (including tax) for every 10 shares.
In the past 18 years, the company's electricity generation increased by 18% compared with the same period last year, the electricity price of coal-fired benchmarking increased compared with the same period last year, and high coal prices dragged down the gross profit margin.
In 2018, electricity consumption in the province continued to maintain the high growth rate in recent years, with a year-on-year increase of 10.4%. The utilization hour was as high as 4126 hours, of which 5269 hours were thermal power utilization hours. With the high growth of electricity consumption in the province, the company's electricity generation for the whole year was 7.452 billion kilowatt-hours, an increase of 18.05 percent over the same period last year, and electricity sales were 7.066 billion kilowatt-hours, an increase of 17.63 percent over the same period last year. In July 2017, the electricity price of coal-fired benchmarking in Jiangxi Province was raised by 0.015 yuan per kilowatt-hour, and the company's grid electricity price increased synchronously. However, as thermal coal prices remained high in 2018, the company's gross profit margin for power generation was only 10.67%, down 0.72pct from a year earlier. In addition, the company's administrative expenses increased by 5.23% year-on-year, financial expenses increased by 16.67%, and investment income increased by 4.15%.
In 19 years, lower value-added tax rate and lower coal prices will improve the company's performance, and the company will control the energy sales company.
In 2019, the government work report proposed to reduce the value-added tax rate of the manufacturing industry from 16% to 13%. Under the condition that the on-grid electricity price of thermal power remains unchanged, the reduction of the value-added tax rate will improve the performance of the company. Since 2019, due to macroeconomic, national regulation and other factors, the tension between supply and demand of thermal coal has eased, coal prices have fallen compared with the same period last year, looking forward to the decline in coal prices to repair the company's profitability. The company plans to jointly invest with Jiangxi Natural Gas and Jiangxi Design Institute to establish Jiangxi Ganeng Energy sales Co., Ltd., in order to enter the areas of electricity distribution, value-added services and comprehensive energy utilization. The company will invest 25.5 million yuan and will hold 51% of the joint venture company.
The third phase of Fengcheng project has been removed from the "blacklist", and the biggest obstacle to resuming work may have been eliminated.
The third phase of Fengdian is a wholly-owned project of the company, which will build 2 × 1 million kilowatt ultra-supercritical coal-fired generating units, which will be included in the suspension list after the "11 / 24" safety accident. The company actively promotes the resumption of work. At present, 48 of the 49 supporting documents have been completed, and only one (construction permit for smoke tower construction) is being processed. In January 2019, the Office of the Safety Commission of the State Council conducted on-site evaluation and feedback on the rectification and rectification of the "11 / 24" accident. On March 18, 2019, the Fengcheng Phase III project was removed from the "blacklist". We believe that the Fengdian Phase III project has been removed from the "blacklist", which means that the project rectification work has been recognized by the relevant departments, and the biggest obstacle to resumption of work may have been eliminated. The current power consumption situation in Jiangxi Province is tight, and the third level of abundant electricity can effectively alleviate the current situation of tight power supply and demand in the province. In addition, the current asset-liability ratio of the company is only 38.21%, the asset-liability ratio is low, and there is room for financing, so a variety of financing methods can be used for future project construction.
Profit forecast: the net profit of the company from 2019 to 2020 is expected to be 2.54 and 267 million yuan, and the EPS is 0.26,0.27 yuan per share. According to the coal price of 840 yuan per ton per hour in 4800 years, we estimate that the full operation of Fengdian Phase III will increase the company's net profit by 350 million yuan.
Risk tips: the resumption of work is not up to expectations, coal prices are rising, electricity consumption is not up to expectations, and electricity prices are reduced.
