Huadian International (600027) quarterly report comments: performance is slightly lower than expected, waiting for profit to continue to improve
Event: According to the company’s disclosed quarterly report, the first quarter of 2019 achieved operating income of 233.
800 million, an annual increase of 4.
04%; net profit attributable to mother 7.
74 ppm, an increase of 12 in ten years.
6%; EPS is 0.
Performance was slightly lower than expected.
The rapid growth of profits due to multiple factors slightly exceeded expectations: the decline in coal prices and the increase in utilization hours boosted the revenue and profit growth in the first quarter.
According to the announcement, the company’s power generation in the first quarter of 2019 was 519.
900 million kWh, an increase of 8 in ten years.
11%, the increase in power generation is due to the increase in new unit commissioning and utilization hours.
In terms of coal prices, fuel cost pressures in the first quarter improved significantly as a result of improved supply and demand for thermal coal and increased rail transport capacity.
In terms of electricity prices, although the ratio of electricity marketization transactions was 30 from 2018Q1.
5% increased to 43 in 2019Q1.
6%, but the electricity price discount is narrowed, and the on-grid electricity price is basically the same, which is 0.
416 yuan / Kwh, the same period last year was 0.
413 yuan / Kwh.
In the first quarter of last year, the fixed cost base was low. Since the second half of last year, the company’s labor costs and maintenance costs have been increasing.
The investment income is affected by the decrease in the share of coal mines, and the investment income is only 1.
28 ppm, a reduction of 36 per year.
In addition, the minority shareholders’ profit and loss in the first quarter was 3.
28 ppm, an increase of 204 per year.
The 1% is expected to be related to the structural differences caused by the high shareholding ratio, profitability of wind power projects and thermal power projects with good profitability, and the increase in profitability of power plant projects with low shareholding ratios.
There is plenty of room for fuel costs to fall, and coal prices are expected to enter the medium and long-term downward channel: Until now, the annual spring maintenance of the Daqin Line has been completed for more than half a month, and the impact of Qingang inventory is not obvious.
Data from China Coal Resources Network show that as of April 25, Qinhuangdao Port’s coal inventory was 639 inches, basically unchanged from the end of last month.
In order to boost the transportation volume, China Railway has recently notified some road bureaus and lines to reduce the ore and coal freight rates. The highest reduction rate that each road bureau can independently determine is 30%.
Coal freight rates are expected to improve significantly.
The average transportation capacity of Mongolia, Hebei, Japan, Japan and Mongolia is expected to increase in 2019, which is expected to intensify the competition between the Three West and Central China corridors, and lead to a decline in coastal coal demand.
Comprehensive coal supply and demand indicators and improvement in transportation capacity, coal prices are expected to step into the medium and long-term downward channel.
Supply-side reforms + demand-side are generally stable, power supply and demand continue to improve, and “price stability and volume increases” 苏州桑拿网 are worth looking forward to: On the supply side, in the context of supply-side reforms, the power industry has stopped construction and slowed down coal-fired power generation and eliminated backward capacitySpeed up.
The faster-than-expected rate of de-capacity is conducive to the improvement of industry concentration and efficiency, which is good for the aforementioned leaders.
On the demand side, considering the overall stability of the macro economy and the steady advancement of electric energy substitution, the electricity consumption of the whole society from 2019 to 2020 will help maintain a medium-speed (5% -6%) growth.
The supply and demand is expected to continue to improve, and the utilization hours of coal-fired generating units are expected to continue to improve.
In terms of electricity prices, the National Development and Reform Commission and the Energy Bureau jointly issued the “Notice on Actively Promoting the Market-oriented Trading of Electricity and Further Improving the Trading Mechanism”, which provides for the establishment of various forms of market price formation mechanisms.
With the gradual transition from oversupply to a balance between supply and demand, power generation companies have a greater say in negotiating electricity prices with large customers, and market-based electricity price discounts tend to shrink.
The company’s thermal power is expected to usher in a new trend of “price stability and volume increase”.
Gradually lower the price of coal, and the profit improvement is expected: The initial government work report proposed that the growth rate of the manufacturing industry should be changed from 16% to 13%. Since the on-grid electricity price of thermal power includes substitution, the expected increase in the case of constant on-grid electricity pricesThe rate reduction has indirectly increased the feed-in tariff. In terms of coal prices, in 2018, due to the increase in the use of coal and the higher-than-expected demand for thermal coal, coupled with environmental protection, safety inspections and other factors affecting the release of high-quality coal, imported coal was also restricted to a certain extent, resulting in continued high coal prices.
If the macroeconomic operation remains stable and weak in the later period, coal demand will gradually weaken, and the successive release of coal production capacity and the easing of coal imports will limit coal prices to quickly return to the green and reasonable range. The company’s thermal power accounted for a high proportion of coal prices.The elasticity is expected to benefit directly from the decline in coal prices.
In addition, the company is a rare low-PB + high-performance flexible thermal power standard in the market.
0, lower than other listed companies of the five largest power generation groups.
In the future, based on the steady increase in unit utilization hours and the narrowing of market-based electricity price discounts, the company’s performance recovery trend and amplitude have reached the industry average.
Investment suggestion: Overweight-A investment rating, 6-month target price of 4.
We expect the company’s revenue growth to be 8 in 2019-2021.
4%, net profit was 28.
300 million, 39.
500 million and 50.
Risk reminder: the risk of electricity price reduction, the growth rate of electricity consumption in the whole society exceeds expectations, and coal prices continue to be high.