SDIC Power (600886): Water and Fire Mutual Aid Drives High Growth Performance Overseas Financing Layout Clean Energy
Event: The company released its 2019 Interim Report.
In the first half of the year, the company achieved operating income of 1.96 million yuan, a year-on-year increase of 10.
25%; net profit attributable to mother 22.
76 ppm, a 44-year increase of 44.
92%, higher than Shen Wanwanyuan’s expected 2 billion yuan.
Key points of investment: The profitability of water and thermal power has increased on average, driving a substantial increase in semi-annual results.
In the first half of the year, the company’s hydropower generation capacity was 371.
8.1 billion degrees, an increase of 7 in ten years.
48%, electricity price is 0.
255 yuan / degree, down by 6 every year.
Thermal power generation 336.
1.3 billion degrees, an increase of 14 in ten years.
31%, electricity price is 0.
377 yuan / degree, down by 3 every year.
Due to the abundant water supply, the Yalong River Hydropower, SDIC’s small Three Gorges power generation grew faster.
SDIC Dachaoshan was affected by the de-capacity of upstream power plants. The growth rate of power generation exceeded 40% and the price of electricity increased by 17.
85%, achieved 5 in the first half.
500 million net profit, an annual increase of about 300 million.
Due to the commissioning of 2 million units of Beijiang Phase II in June last year, the performance growth increased by about 1.
Due to the high growth of power consumption in Guangxi and the decline in coal prices, the profitability of the Qinzhou fleet increased in the Beibu Gulf in the first half of the year, and the total growth rate increased by about 1.
Due to the decline in coal prices and the increase in tax cuts in the second quarter, Anhui Xuancheng turned losses into profits.
The profitability of joint ventures and joint ventures increased, and the company’s investment income increased by more than 200 million in the first half of the year.
The company’s water and thermal power have achieved profit growth, driving the net profit of mothers in the first half of the year to increase by nearly 45% year by year.
The proposed Global Depositary Receipt (GDR) is to be applied for listing on the London Stock Exchange to develop overseas clean energy.
The company plans to issue no more than 10% of the total share capital, and the number of corresponding A shares shall not exceed 6.
The GDR of 7.9 billion shares has been approved by the SASAC in principle and is still subject to the approval of the shareholders’ general meeting, as well as the approval of the China Securities Regulatory Commission and the UK securities regulatory authority.
The GDR issued by the company is intended to be used for existing clean energy projects in overseas construction machinery reserves, or for other potential overseas acquisition opportunities.
The company’s wholly-owned subsidiary, Red Rock Power, has a 25% stake in the Beatrice project (58.
80,000 kilowatts) has been officially approved for commercial transportation at the end of July, and there are other early-inch infrastructure projects (78 capes).
In May this year, the company’s wholly-owned subsidiary started with 4.
6.8 billion shares acquired 100% equity interest in Xinjiang Trike Solar held by Jiangsu Trina Solar.
The company deploys non-aqueous renewable energy sources at home and abroad, improves the installed structure, and continuously contributes to the increase in performance.
When the development of the middle reaches of the Yalong River was underway, supporting the delivery of extra-high voltage 南宁桑拿 lines, the peak of production was ushered in during the 14th Five-Year Plan period.In 2018, the UHV DC UHV transmission project in the middle reaches of the Yalong River has been included in the list of key transmission and transformation project documents accelerated by the National Energy Administration, and subsequent construction has gradually accelerated.
The company has the right to develop the entire Yalong River basin, and currently holds a installed hydropower capacity of 16.72 million kW.
At present, Yangfanggou and Lianghekou Hydropower Station, which are under construction in the midstream, have a total installed capacity of 4.5 million kilowatts, and are scheduled to be put into production in 2021-2023.
The preliminary work of the other 5 power stations in the midstream is effectively progressing. The proposed project totals 7.3 million kilowatts. It is estimated that the company’s installed hydropower capacity will reach 28.52 million kilowatts in 2025.
Earnings forecast and rating: With reference to the semi-annual report results and the trend of coal prices in the first half of the year, we raise the company’s net profit forecast to 50% in 2019-2021.
5 and 54.
1 ppm (48 before the increase.
352 million), the current expected PE is 12, 12, and 12 times.
The Yalong River has a stable performance and the largest medium-to-long-term growth potential. This year, the thermal power sector is expected to continue to benefit from the drop in coal prices, improved power generation efficiency, continued improvement in profits, and maintain a “Buy” rating.