China Shenhua (601088): China Shenhua Series In-depth Report (1)-Electricity

China Shenhua (601088): China Shenhua Series In-depth Report (1)-Electricity

Investment Highlights Beijing Guodian has a 16% potential power generation increase: China Shenhua and Guodian Power each injected power assets to form a joint venture, Beijing Guodian.

Beijing Guodian’s installed capacity is 67.37 million kilowatts, and another 9.54 million kilowatts of units under construction are expected to be gradually connected to the grid at the end of 2019, which can gradually increase the scale by 14%.

2020 is expected to increase power generation by about 16% compared to 2017.

China Shenhua accounts for 42 Beijing Guodian.

53% shares, enjoy investment income.

To ease regional homogeneous competition, the proportion of advanced units was 67.

9%: Jointly listed companies inject plants with high regional coincidence into Beijing Guodian, which can ease regional homogeneous competition.

Beijing Guodian’s assets are concentrated in power-deficient provinces such as Jiangsu and Zhejiang, as well as on the “west-to-east power transmission” trunk line, with advanced units accounting for 67.

9%, higher than the original Guodian Power.

This reorganization has increased the market share and concentration of the corresponding regions and further enhanced the market competitive advantage.

Shenhua helps power plants reduce fuel costs and increases their installed capacity. Coal exposure: Guodian Power injected into Beijing Guodian’s power plants the original purchase of Shenhua coal only accounted for 3%.


These plants are mostly distributed near the Shenhua production area or in the transportation area. In the future, China Shenhua’s “production, transportation and sales” integration advantage can be used to increase the proportion of Shenhua coal purchase. If coal is purchased at a long-term price, fuel costs can be effectively reduced.

At the same time, Beijing Guodian can add China Shenhua 7100 initial / annual coal consumption.

China Shenhua reserves high-quality thermal power resources: China Shenhua still has 2,858.

The scale of 40,000 kilowatts of thermal power installed capacity, of which half of the units to supply standard coal consumption is lower than the scale of China Shenhua, and the number of hours of use of units distributed in high power price provinces exceeds the smallest of Shenhua.

The operating targets for 2019 have fully considered the divestiture of power assets, and the gross profit margin of the power generation segment is expected to maintain growth.

Taking into account the impact of the divestiture of power assets, China Shenhua lowered its operating targets for 2019, in which the planned sales of electricity dropped by 46.

5%, the decline is matched with the installed capacity of the stripped.

China Shenhua’s uninvested power plants can still maintain efficient and stable operation. Based on this, we expect the gross profit margin of the power generation segment to increase by 4%.

Investment strategy: It is estimated that Beijing Guodian’s net profit attributable to mothers in 2019-2020 will be 54.

7.2杭州夜网论坛 billion, 63.

810,000 yuan, 29 attributable to China Shenhua.

28 ppm, 35.

79 trillion, respectively contributed to China Shenhua 6.

52%, 7.

87% net profit.

Based on the core assumptions of -1%, -2%, and -1% changes in coal prices over the next three years, we have adjusted our profit forecasts. It is estimated that China Shenhua’s attributable net profit for 2019-2021 will be 449.

1.7 billion, 454.

8.5 billion, 463.

21 trillion, EPS is 2 respectively.

26 yuan, 2.

29 yuan, 2.

33 yuan, corresponding to the closing price of PE on March 26, 2019 is 9.

3X, 9.

2X, 9.

0X, maintaining the level of “prudent overweight”.

Risk reminder: macroeconomic fluctuations, electricity price adjustments, industrial policy risks, environmental protection supervision, project replacement completed as scheduled, asset ownership risks, bond debt transfer risks; 重庆耍耍网 considering the same caliber of financial data, the three major statements in the schedule are not based on partsAdjustments to the divestiture of power assets may cause some predicted values to differ from actual published values.

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