Items:
In 2019, the power generation enterprises affiliated to the company completed a total of 18.861 billion kilowatt-hours of electricity generation, an increase of 10.3 percent over the same period last year; and online electricity consumption of 17.715 billion kilowatt-hours, an increase of 10.4 percent over the same period last year. It is estimated that the net profit attributed to shareholders of listed companies in 2019 is 5.52-614 million yuan, an increase of 164.51 percent, 194.22 percent, and 0.498-0.554 yuan over the same period last year.
Comments:
The power consumption is high and the incoming water is dry, and the thermal power is over-generated. In 2019, the company's electricity generation increased by 10.3% compared with the same period last year.
Mainly due to: 1. The high demand for electricity in Hubei Province. From January to November 2019, the growth rate of electricity consumption in Hubei Province was 7.4%, which was higher than the national average 2.9pct. In November, the cumulative growth rates of electricity consumption in electronic and communications equipment, automobile manufacturing, oil and coal and fuel processing, transportation, information services, wholesale and retail, and public services in Hubei Province were 32.3%, 7.3%, 10.1%, 7.3%, 18.7%, 7.8% and 12.2%, respectively, driving the electricity consumption of the secondary and tertiary industries to increase by 4.9% and 9.3%, respectively. 2. The inflow of the main stream of the Yangtze River and the Qingjiang and Hanjiang basins in Hubei Province has dropped sharply, and the hydropower output has decreased greatly. The electricity supply gap caused by the high electricity consumption and the decline in hydropower generation needs to be made up by thermal power.
The increase in electricity, the reduction in coal prices and value-added tax rates are the main reasons for the improvement of the company's performance. In 2019, the increase in the company's performance was mainly due to a significant increase in electricity consumption, a decline in fuel costs and a reduction in value-added tax rates. 1) the company's total online electricity for the whole year was 17.715 billion kWh, an increase of 1.768 billion kWh over the same period last year; 2) on April 1, 2019, the value-added tax rate was reduced by 3pct, and the company's tax-free electricity price increased by 0.9 cents per kWh; 3) from January to November 2019, the average price of thermal coal in Hubei Province was 579.3 yuan / ton, down 7.4% from the same period last year, ranking eighth in all provinces in the country.
Market-oriented profits are relatively moderate, Hanchuan a hair, long source a hair still implement the approved price. In 2019, the market-oriented contract electricity consumption in Hubei Province was 62.362 billion kWh, accounting for about 30%, an increase of 10 pct / kWh in 2019 compared with 2018. The average price reduction of trading electricity was 0.75 fen / kWh in 2018, and the average price reduction in 2018 was 1.5 fen / kWh. In 2019, comprehensive electricity sold a profit of 0.225 cents / kWh, 0.075 fen / kWh less than in 2018. Although the proportion of marketization is increasing, the reduction of discount is even greater, so that the comprehensive electricity price including tax has been improved. On December 31, 2019, the Hubei Provincial Development and Reform Commission issued the implementation Plan for deepening the Reform of the formation Mechanism of on-grid electricity Price for Coal-fired Power Generation, clarifying the non-market electricity of coal-fired generating units with non-benchmarking electricity price in 2020, and on the basis of implementing the feed-in electricity price approved by the government in the same period, continue to implement the current ultra-low emission electricity price policy. That is, the approved price of Hanchuan and Changyuan will still be implemented and will not be reduced to the benchmark price.
There is game space for Haoji railway freight rate, and coal price is expected to continue to fall. The freight rate from Hao-Ji railway to Hubei is 0.2024 yuan / ton-km, which is 10% higher than expected. the downstream demand for Hao-Ji railway transport volume is weakened, and the follow-up tariff game will continue, and there is room for downward pricing. Nationwide, in October, the gap between supply and demand of thermal coal is-16 million tons, the gap between supply and demand of thermal coal is negative for two consecutive months, supply and demand continues to be loose, and coal prices are expected to continue to fall.
Profit forecast, valuation and investment rating: due to the year-on-year decline in electricity consumption in the fourth quarter, we adjusted the company's 2019-2021 net profit forecast to 570 million yuan, 720 million yuan and 860 million yuan (the original forecast was 590 million yuan, 680 million yuan and 880 million yuan), an increase of 172.6%, 26.2% and 20.2%, corresponding to a PE of 9.3,7.4,6.1 times. Refer to the CS thermal power sector comparable company's average PE value of 11 times in 2020, give the company 11 times PE in 2020, corresponding to the target price of 7.12 yuan, maintain a "strong push" rating.
Risk hints: coal prices have risen sharply; electricity prices have been reduced; power generation has fallen short of expectations.
