Key investment points:
The fundamentals of the industry are both supply and demand, and the high prosperity continues. The electricity consumption in the first quarter of 23 and 24 years has achieved rapid growth. In 2013, the annual electricity consumption increased by 6.7% year on year. In the first quarter of 2014, the electricity consumption of the whole society increased 9.8% year on year, 6.20 pct higher than the same period last year. In 2003, the cumulative power generation of power plants above designated size was 8909.1 billion kilowatt hours, up 5.2% year on year, up 3.0 percentage points over the same period last year; Among them, thermal power, hydropower, wind power, nuclear power and photovoltaic power generation were+6.1%, - 5.6%,+12.3%,+3.7% and+17.2% year on year respectively. In the first quarter of 2014, the cumulative power generation of power plants above designated size was 2237.2 billion kWh, up 6.7% year on year, 4.3 percentage points higher than the same period last year; Among them, thermal power, hydropower, wind power, nuclear power and photovoltaic power generation are respectively+6.6%,+2.2%,+11.0%,+0.6% and+17.5% year on year.
Summary of power sector report: steady income and improved profitability. On the income side, the revenue of the power sector increased more than expected in 23 years; In the first quarter of 2014, the overall revenue of the power sector increased slowly, while the revenue growth of the thermal power sector increased compared with the same period last year. In 23 years, the electric power sector realized a revenue of 159071 billion yuan, an increase of 4.2% year on year. In the first quarter of 2014, the revenue of the power sector was 392.136 billion yuan, up 3.1% year on year, of which the revenue of the hydropower sector grew at the highest rate of 4.1%; The revenue of thermal power sector grew by 3.0% year on year, a slight increase compared with the same period last year; The growth rate of green power revenue was slightly lower than that of the same period last year. On the profit side, the overall profit level in the first quarter of 2014 increased, mainly due to the contribution of thermal power. In 2013, the gross profit rate of the electric power sector was 21.0%, up 5.3 percentage points year on year; Net profit attributable to the parent company reached 128.91 billion yuan, up 77.2% year on year. In the first quarter of 2014, the gross profit rate of the power sector was 21.9%, up 3.2 percentage points year on year; Net profit attributable to the parent company reached 39.56 billion yuan, up 36.5% year on year.
Thermal power sector: cost improvement and performance thickening, with significant increase in profitability. Industry: revenue side, the thermal power sector achieved revenue of 1170.13 billion yuan in 23 years, up 4.2% year on year. In the first quarter of 24 years, the thermal power sector achieved a revenue of 294.23 billion yuan, up 3.0% year on year, 1.3 percentage points higher than the growth rate in the same period last year. We believe that the thermal power sector has prominent advantages in the context of the steady growth of electricity demand in the first quarter and the improvement of the cost side. On the profit side, the improvement of upstream fuel prices significantly thickened thermal power performance. In 23 years, the gross profit rate of thermal power sector was 12.7%, up 6.0 percentage points year on year; The net profit attributable to the parent company turned around sharply year on year. In the first quarter of 2014, the gross profit rate of thermal power sector reached 14.16%, an increase of 4.13 percentage points year on year; Net profit attributable to the parent company increased by 104.5% year on year. Financial expenses declined, and the capital structure continued to optimize. In terms of individual stocks: on the income side, thermal power sector companies achieved a high proportion of growth under the stable growth of power generation. In 23 years, 16 of the 23 sample companies in the thermal power sector achieved positive revenue growth, with a median year-on-year growth rate of 4.8%. In the first quarter of 2014, 14 companies achieved positive revenue growth, with the median year-on-year growth rate of 4.3%. On the profit side, most of the gross profit rates of national and local thermal power companies in the whole year of 23 and the first quarter of 24 showed an upward trend, and only a few companies saw their gross profit rates decline. In 23 years, a total of 7 companies turned losses into profits; In 24 years, a total of 3 companies turned losses into profits, namely, China Construction Investment Energy, Henan Energy Holding and Huayin Power. The gross profit per kilowatt hour in the Yangtze River Delta and Guangdong coastal areas has increased rapidly, which we believe may be due to the higher feed in price in coastal areas, the higher degree of electricity marketization and the cost improvement measures taken by relevant regional companies. The dividend yield of thermal power companies in 23 years increased significantly compared with that in 22 years, and Baoxin Energy, Sheneng Shares, Zheneng Power, Inner Mongolia Huadian, Beijing Energy Power and Wanneng Power ranked among the top six.
In the hydropower sector, the shortage of incoming water affected the rise of superimposed electricity prices, and the overall performance increased steadily. Industry: on the income side, the low water supply has an impact on the price of hydropower, and the overall revenue level remains stable.
According to the selected sample companies, the revenue of hydropower sector in the whole year of 23 and the first quarter of 24 were 174.25 billion yuan and 37.86 billion yuan respectively, with year-on-year growth of 7.7% and 4.1%; On the profit side, the gross profit rate of hydropower sector in the whole year of 23 years was 47.9%, up 7.1 percentage points year on year; Net profit attributable to the parent company increased by 12.0% year on year.
In the first quarter of 2014, the gross profit rate of hydropower sector reached 44.1%, an increase of 1.81 percentage points year on year; Net profit attributable to the parent company increased by 17.4% year on year. In 23 years, the average on grid price of hydropower companies was 322.6 yuan/MWh, up 5.96% year on year. In the first quarter, the solvency of hydropower sector showed an upward trend. In terms of individual shares:
On the income side, the performance in 23 years was differentiated, and the overall revenue in the first quarter of 24 years increased. On the profit side, some companies in the hydropower sector were slightly under pressure in 23 years, and the overall profitability in the first quarter of 24 years rose. After 23 years of decline in the performance of half of the companies in the hydropower sector due to the shortage of incoming water, the performance of the companies recovered in the first quarter of 24 years, and the net profits attributable to the parent companies of the eight companies achieved positive growth. From the perspective of profitability per kilowatt hour, the overall gross profit per kilowatt hour of hydropower sector companies has increased in 23 years, mainly due to the higher than expected increase in electricity prices in relevant power transmission regions. In 23 years, the dividend rate of companies in the hydropower sector was generally stable, and the dividend rate of SDIC Power, Guiguan Power and Changjiang Power ranked among the top three.
In the green power sector, revenue increased slightly, and the profit side was under overall pressure. In terms of industry: under the superposition effect of the increase of installed capacity and the decline of new energy grid price, the annual revenue of green power sector in 23 years was 246.33 billion yuan, an increase of 2.1% year on year; In the first quarter of 2014, the revenue reached 60.05 billion yuan, up 3.0% year on year. The profit side is slightly under pressure. In the whole year of 23, the gross profit rate of the green power sector was 41.4%, up 0.7 percentage points year on year, and the net profit attributable to the parent company increased 10.4% year on year. In the first quarter of 2014, the gross profit rate of the green power sector was 45.8%, down 0.5 percentage point year on year, and the net profit attributable to the parent company increased by 0.5% year on year; The pressure on the gross profit margin in the first quarter was mainly caused by the decline of new energy price, the decline of average utilization hours of equipment, and the lower than expected performance of some companies under the influence of wind power generation. In terms of individual stocks: on the income side, the performance of companies in the green power sector is relatively differentiated. On the profit side, some green power companies still need to recover. Influenced by the further marketization of new energy electricity prices, the rapid increase of installed capacity and the guidance of the parity grid connection policy, the wind power and photovoltaic grid connection prices have further declined, and the gross profit per kilowatt hour of companies in the green power sector is under pressure.
Investment strategy: on the power consumption side, in the first quarter of 2024, the growth rate of power consumption in the whole society and sub sectors will maintain a high growth trend, and the proportion of three industries will further increase; Driven by the development of new quality productivity and the trend of electricity substitution in the future, the demand for electricity consumption may further increase. Among them, the emerging industries in the Yangtze River Delta and Guangdong Anhui regions have an early layout and a relatively high scale, and the related industries such as photovoltaic manufacturing and AI data center are mostly new high energy consuming industries. It is expected that the power demand in the above regions will further increase. On the power generation side, thermal power sector: in the short term, thermal power companies benefited from improved performance on the cost side, with significant growth. It is expected that the possibility of a sharp rebound in upstream fuel prices is weak, and the advantages of the thermal power sector in the whole year will remain prominent under a good start; In the long run, the coal power capacity pricing mechanism is gradually promoted, and the proportion of fixed costs recovered through capacity pricing is gradually increased; The two-part electricity price will continue to support the stable profitability and dividend ability of thermal power enterprises, and the new value points under the improvement of the business model of thermal power target still need to be explored by the market. Hydropower sector: in the short term, Guangxi, Guizhou and other places have experienced heavy rains in 24 years, and the water inflow in the second quarter may be improved at the margin; In the long run, the peak of hydropower capital expenditure has passed, and the electricity price may still rise. With the continuous optimization of the capital structure, the dividend ratio still has room for improvement. It is suggested to focus on the Yangtze River Delta thermal power leaders [Waneng Power], [Sheneng Shares] and [Zheneng Shares] with more significant regional advantages; National power plants [Guodian Power] and [Huadian International] that have fully benefited from the achievements of power market reform; [Changjiang Power] and [SDIC Power] under the background of expected improvement of incoming water and continuous dividend style.
Risk warning: Electricity market transactions cause fluctuations in grid price; The price of steam coal rises; Power demand is less than expected; The decrease of precipitation led to the unexpected water inflow.
