Changyuan Power (000966): Multi-factor trend is improving; third quarter earnings are slightly better than expected

Changyuan Power (000966): Multi-factor trend is improving; third quarter earnings are slightly better than expected
The third quarter performance was slightly higher than expected: According to the performance forecast, the company expects to achieve net profit attributable to mothers in the first three quarters of 2019.72-5.720,000 yuan, an increase of 178 in ten 杭州桑拿 years.2% -237.2%; in the third quarter alone, the company expects to achieve net profit attributable to mothers2.17-3.17 ppm, an increase of 49 in ten years.2% -117.9%.The company’s performance achieved high growth, slightly exceeding expectations. The increase in the number of hours and the decline in coal prices have boosted the high growth in the third quarter: benefiting from a better macroeconomic operating situation in Hubei Province, the electricity consumption of the whole society has maintained a high growth.According to CEC data, from January to August 2019, Hubei’s entire society consumed 149.5 billion kilowatt-hours of electricity (+8.2%), the growth rate of electricity consumption is much higher than the national average (+4.5%).Benefiting from the reform of the power supply side, the scale of power supply and demand in Hubei Province continued to improve, coupled 杭州夜网 with the inadequate water and electricity supply, the company’s thermal power unit utilization hours increased significantly.Benefiting from the decline in coal prices, the company’s integrated standard coal unit price has declined over the years.According to data from the Coal Resources Network, coal prices in Hubei Province have been steadily declining, and the thermal coal price index has continued to increase negatively for eight consecutive months from year to date.In August 2019, the thermal coal price index was 588 yuan / ton, a continuous decline of 7.9%. The Haoji Railway (formerly the Menghua Railway) was put into production as scheduled, and continued to be optimistic about the improvement of the company’s profitability: Until the end of June 2019, the company’s installed capacity was 370.50,000 kilowatts, of which 3.59 million kilowatts are thermal power and 9 are wind power.350,000 kilowatts, biomass 2.160,000 kilowatts, thermal power accounts for up to 97%, has the characteristics of high elasticity of coal prices, and the entire thermal power unit has heating capacity.Due to the lack of coal resources in Hubei Province, coal combustion mainly comes from long-distance transportation from other provinces, and fuel costs remain high.Considering that the national coal supply and demand indicators have improved significantly in 2019, the Haoji Railway was successfully put into operation on the eve of National Day 2019, which directly alleviated the double problem of “high procurement costs and high transportation costs” in central China.The company is located in the Central China Electric Load Center, Changyuan Yifa is in the Electric Load Center in Wuhan, Jingmen Company is located in the power support point in the middle of Hubei Power Grid, and Hanchuan Yifa is an important large power point in Jiangbei., Proactively plan power.At the same time, by sorting out the construction progress of key power engineering projects in Hubei Province, and trimming the scale of large-scale power generation projects put into production in 2019, the power supply and demand layout of Hubei Province is expected to continue to improve.Against the background of high power consumption growth, the stock of thermal power units is expected to achieve breakthrough utilization hours. Hubei Province is more prosperous during the peak season, with high inventory and high transfers to effectively meet the high consumption demand: According to data from the Hubei Development and Reform Commission, from January to August 2019, the province ‘s unified power plant gradually transferred 3708 coal instead of coal, increasing 734.5 cations; 3648 coal is gradually consumed.5 nominal, an increase of 718.7 benchmark, the increase in transportation volume and coal consumption exceeded 20%.In August, the amount of thermal coal transportation, consumption and inventory showed a “three highs” trend. The province’s unified power plant transferred the position of thermal coal to 494, an increase of 134 feet; the consumption of thermal coal was 585.5 digits, increased by 128.6 announcements; month-end inventory 497.7 nominal, an increase of 134.In March, according to the average daily coal consumption in the same period of the previous year, it can meet the 34-day consumption.Although thermal power generation has grown rapidly, high transfers and high inventory have effectively ensured high coal consumption demand. Actively deploy onshore wind power business to further open up the growth space: As of the end of June 2019, the company has 9 grid-connected wind power projects.350,000 kilowatts, achieving a net profit of 20.9 million in the first half of 2019.The Jiyangshan project (50,000 kilowatts) commenced construction in June 2018, and the first units will advance to the grid for power generation in the second half of 2019.China Mountain Phase II Project (4.950,000 kilowatts) has been approved by the Provincial Development and Reform Commission, and strive to start production by the end of 2019.In the context of suspension of construction and slow construction of thermal power projects, actively developing onshore wind power projects with good profitability is expected to further improve the company’s operating performance. Investment recommendation: Buy-A investment rating, 6-month target price of 6.0 yuan.We expect the company’s revenue growth to be 14 in 2019-2021.0%, 1.9%, 1.5%, net profit is 7 respectively.0 billion, 9.0 billion, 10.50,000 yuan, corresponding to a price-earnings ratio of 7.9 times, 6.2 times and 5.3 times. Risk warning: coal prices continue to be high, risks of lowering electricity prices, and wind power projects are progressing less than expected.