Zheneng Power (600023) 2018 Annual Report Comments: The performance was less than expected but the worst time has passed
The company has passed the worst stage of dual energy control. It is expected that the performance in 2019 will reach an inflection point and be accelerated and released flexibly; the P / B ratio will be converted to the bottom of the listing and it is estimated that the recovery potential is large; the company’s total yield is close to 4% and there is still potentialPotential growth potential.
Maintain “Buy” rating and target price of 6.
Initial performance is 0.
30 yuan, less than expected: the company gradually realized revenue of 566.
30,000 yuan, an increase of 10 in ten years.
6%; net profit attributable to mother 40.
3.6 billion, down 6 every year.
9%; converted to basic earnings per share of 0.
The performance was lower than expected, and the “double control” of energy in the province affected the company’s Q4 power generation.
In addition, the company plans to pay zero dividends.
18 yuan / share.
Batteries have grown steadily, and the overall gross profit margin has increased: Zhejiang ‘s strong demand for electricity has driven the company ‘s power generation by 124.1 billion kilowatt-hours, an increase of 7.
6%, of which the market electricity is 30.2 billion kilowatt hours, accounting for 25.
8%, basically the same as in 2017; the impact rate was reduced, the market electricity price discount narrowed, and other factors, the comprehensive electricity price rose slightly.
However, the increase in volume and price cannot effectively cover the increase in fuel costs brought by the increase in coal prices. The company’s comprehensive gross profit margin is 9.
5%, down 2 every year.
In terms of period expenses, the three fees were basically stable, and the company maintained efficient management.
The company’s annual net cash flow from operating activities was 67.
7 ppm, better matching profit and scale competitiveness.
The worst moment has passed, waiting for profit recovery: The company’s coal-fired unit utilization hours in the province were compressed by Zhejiang ‘s implementation of the “dual control” policy of energy in the fourth quarter of 2018, resulting in only 279 power generation in the fourth quarter of 2018Million kilowatt hours, while shortening by 6%, compared with 17% from formaldehyde.
Although the impact of the dual-control policy still exists, the economy naturally dropped to the decline in coal consumption pressure in the province, the downward trend in coal prices due to the expansion of loose supply and demand, and the increase in on-grid 天津夜网 electricity prices brought about by a new round of reduction in incremental rates.As far as the worst is concerned, the company’s earnings will resume its growth trend in 2019.
Risk factors: macroeconomic downturn drags down power demand; coal prices significantly higher than expected growth to drive up costs; benchmark feed-in tariff reductions drag down revenue; investment recommendations: consider dual-control effects and lower 2019-2020 power forecasts and revised EPS forecasts to 0.
53 yuan (previous forecast was 0.
66 yuan), plus EPS forecast of 2021 0.
65 yuan, the company’s current sustainable corresponding P / E is 12/10/8 times.
Based on estimates of comparable companies and company history, we give companies 1 in 2019.
3 times P / B, corresponding to a target price of 6.
10 yuan, maintain “Buy” rating.