Chuantou Energy (600674) in-depth research report： installed capacity will be ample cash flow from intensive production and open dividend imagination
Chuantou Energy (600674) in-depth research report: installed capacity will be ample cash flow from intensive production and open dividend imagination
The company is a pure hydropower operating company.
The company’s equity installed capacity was 9.31 million kilowatts, of which hydropower equity installed capacity was 8.98 million kilowatts, ranking third in listed hydropower companies.
The company’s core assets are 48% equity of Yalongjiang Hydropower, and 97% of its net profit comes from the investment income of Yalongjiang Hydropower.
In 2019, the Yalong River’s hydropower utilization hours were as high as 5,077 hours, which were higher than the Yangtze River Power and Huaneng Hydropower, with a national average of 456, 350, and 1351 hours.
The strong profitability of Yalong River Hydropower requires the company’s ROE to be maintained at a high level. The company’s nominal ROE is 23 in 2015-2018.
At the two estuaries of the middle reaches of the Yalong River, the Yangfanggou Hydropower Station is expected to be put into operation successively from 2021 to 2023. At that time, the company ‘s hydropower installed capacity will reach 11.14 million kilowatts, an increase of 24% from the current, and profitability and cash will be significantly improved.
The Yalong River has no worry.
In 2018, the Yalong River’s hydropower capacity was 73.8 billion kWh.
Among them, 50% will be delivered to Jiangsu and 40% will be delivered to Sichuan.
2%, send Chongqing to accept 9.
Jiangsu Province requires an active and orderly expansion of calls from outside the region to reduce the power generation of public coal-fired generating units. The construction of supporting power supplies for Yanhuai DC and Xitai DC has lagged behind, and Tianwan Nuclear Power Units 5 and 6 have not been in operation, and the power recovery gap cannot be recovered.
Therefore, Jiangsu’s incoming call relays outside the Jinguan power group.
Sichuan and Chongqing have rapid economic development and strong demand for electricity.
Electricity prices will stabilize and rise in 2020.
The current floor price of Jinguan Power Group to Jiangsu is 0.
RMB 365 / kWh, respectively, is lower than the Jiangsu coal power benchmark price (including environmental protection electricity price) in 2020, the average on-grid electricity price of coal electricity, and the market-based electricity price of coal electricity2.
6 minutes / kWh, 0.
5 minutes / kWh, -0.
2 minutes per kilowatt-hour, almost no drop airborne.
Ertan, Jinguan Power Group, Tongzilin Liuchuan electricity price discount rate is much higher than Sichuan Province’s average discount rate of hydropower is 4 cents / kWh.
We expect that in 2020, the discounted electricity price in Liuchuan will be consistent with the average discounted price in Sichuan Province, and it will be sent to Jiangsu.
259 yuan / kWh, an increase of 0 from 2019.
8 minutes / kWh.
The normal operating period of Lianghekou and Yangfanggou can contribute 24.
100 million net profit.
We estimate that the hydropower consumption of the two estuaries is mainly consumed locally in Sichuan, and the Yangfanggou hydropower consumption is mainly delivered to Jiangxi and Hunan through the Yazhong-Jiangxi DC UHV.
Comparing the Northwest Yunnan-Guangdong DC and Jinsu DC, we estimate the matching transmission price 成都桑拿网 of Yazhong-Jiangxi DC, and the transmission price is 1.
At 88 cents / kWh, Yangfanggou’s on-grid electricity price is 0 based on the backward method.
3287 yuan / kWh; the on-grid price of hydropower in Lianghekou is set at 0 for Sichuan coal and electricity.
4012 yuan / kWh.
Based on this calculation, the internal rate of return on capital of the Lianghekou and Yangfanggou projects is 6 respectively.
0%, 6.7%, which is higher than the average return on net assets of previous enterprises and electric power production enterprises.
At this time, the Lianghekou and Yangfanggou hydropower stations contributed 18 to the Yalong River during the normal operating period.
700 million net profit.
Ample cash flow opens up the space for dividends.
From 2016 to 2018, the company’s dividend ratio remained at about 37%, which was far lower than that of Yangtze Power and Hehuaneng Hydropower.
In 2019, the company issued 4 billion convertible bonds to increase capital in Yalong River Hydropower, which will keep the company’s cash flow abundant.
We estimate that from 2019 to 2023, Sichuan Investment has a room to increase its energy dividend ratio by approximately 21%.
Earnings forecasts, estimates and investment ratings.
We expect the company to achieve net profit attributable to mothers in 2019-2021.
3 billion, 31.
600 million and 32.
1 ppm, a ten-year increase of -17.
Through comparative estimation analysis of comparable companies and DCF estimation analysis, the estimated target prices of the companies are 10 respectively.
05 yuan, 12.
26 yuan, we take the average of 11.
16 yuan as some of the company’s target price, exceeding the current ongoing 23.
5%, the first coverage, given a “strong push” rating.
Risk warning: lower electricity prices; lower water supply; lower demand; lower income benefits than expected.