Shenneng (600642): Downward coal price boosts performance and improves clean energy generation

Shenneng (600642): Downward coal price boosts performance and improves clean energy generation

Event: The company released the third quarter report of 2019.

The company achieved operating income of 284 in the first three quarters.

23 ppm, a five-year increase of 5.

17%; net profit attributable to mother 16.

760,000 yuan, an increase of 33 in ten years.

94%, in line with Shen Wanwanyuan’s expectations.

Key points of investment: the increase in the amount of coal-fired power generation, the rapid growth of clean energy power generation, and the decline in coal prices to increase profitability.

Affected by Shanghai’s power consumption acceleration (the cumulative extension in the first three quarters decreased by 1.
).

22%) and the scale of incoming calls increased (in the first three quarters, the annual growth rate increased by 7.
).

47%). The company’s coal power generation in the first three quarters of the year decreased by 9 each year.

9%, but the decline is lower than the overall decline of Shanghai’s coal power generation of 14.
.

01%.

In terms of coal prices, due to the easing of coal supply and demand in the country and the impact of imported coal, the average thermal coal price index in Shanghai fell by 12 in the first three quarters.

8%, a drop in the forefront of the country, helping the company’s performance improve.

In terms of clean energy, gas-fired power generation benefited from the commissioning of two units of Chongming Power Plant and two units of Fengxian Power Plant in May 2018 and June 2019, respectively. The first three quarters of power generation increased by 46.

5%.

Wind power photovoltaics benefited from the acquisition of seven new energy projects in December 2018 and the full-scale production of the first phase of Lingang Offshore Wind Power. The first three quarters of wind power photovoltaic power generation reached 8 respectively.

1 and 2.

0 billion kWh, an increase of 24 in ten years.

1% and 573.

3%, continued to contribute to the company’s performance increase.

As a result of the joint 杭州夜生活网 venture, the profitability of the joint-stock companies has improved, and the fair value of financial assets in the third quarter has been basically flat.

Due to the downward trend in coal prices, the company’s shareholding in coal-fired power companies increased their profitability. The investment income of associates and joint ventures in the first three quarters increased by approximately 100 million, of which the single quarter exceeded the increase of approximately 50 million yuan.

From this year, the financial assets held by the company will be recognized as gains and losses from changes in fair value. In the first half of the year, the company increased its investment income by approximately 1 due to the fair value of ETF products and stocks held.

22 trillion, the stock market performance in the third quarter was relatively flat, and the fair value was basically flat.

In the second phase of Pingshan, the development progress of Xinjiang oil and gas fields and other projects has accelerated, and the layout of the entire energy industry chain has been continuously improved.

The company’s national demonstration project of Pingshan Phase II 1.35 million kilowatt units in Huaibei, Anhui, is progressing in an orderly manner.

Anhui is a green province predicted for coal power construction. Due to the capacity transfer in the Yangtze River Delta and the increase in the local urbanization rate, power demand has maintained rapid growth.

After the completion of the second phase of Pingshan, it will stay in Anhui for local consumption, which is expected to benefit from the high growth of local electricity consumption.

In the field of oil and gas exploration, the company actively promoted the exploration work for well PH12 in the Pinghu oil and gas field in the East China Sea to ensure stable production and increase reserves.

Xinjiang oil and gas block exploration has completed the 3D seismic acquisition in advance in June, and has passed the acceptance of experts. Data processing and interpretation are currently underway.

Yangtze Power continues to increase its holdings and is currently the third largest shareholder.

Compared with the end of June, Yangtze Power increased its stake in the company in the third quarter.

69%, the shareholding ratio has reached 3 at the end of September.

71%, ranking the third largest shareholder, the company continues to receive industrial capital recognition.
Profit forecast and investment grade: For the time being, we do not consider the investment returns of oil and gas field extraction and pumped storage power generation. We maintain the forecast company 19?
The net profit attributable to mothers for 21 years was 22 respectively.

51, 24.

46 and 26.
1.7 billion.

Currently, the corresponding PEs are 13, 12, and 11 times.

The company’s asset structure has a stable and high-quality profitability, and actively deploys clean energy and upstream resources, which brings development growth and maintains the “overweight” level.

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