SDIC Power (600886) 2018 Annual Report Comments: Thermal Power Seriously Reduces Loss of Hydropower More Than Expected

SDIC Power (600886) 2018 Annual Report Comments: Thermal Power Seriously Reduces Loss of Hydropower More Than Expected

Guide to this report: Benefiting from the improvement of utilization hours and the increase of electricity prices, the thermal power sector has significantly reduced losses in 18 years, and it is forecast to turn losses into profit in 19 years; Hydropower has benefited from the reduction of policy benefits, and its performance exceeded expectations.

Maintain overweight.

  Investment highlights: Investment advice: Target price 9.

76 yuan, to maintain overweight.

Thermal power reduced losses significantly, hydropower 武汉桑拿 exceeded expectations, and the company’s 18-year performance exceeded expectations. Taking into account the adjustment of the conversion rate, it raised 19/20 years and increased the EPS forecast for 21 years to 0.



77 yuan (19/20 before adjustment is 0.


65 yuan), giving the company an average of 14 times PE, 19-year target price of 9.

76 yuan, to maintain overweight.

  Event: On March 27, the company released its 2018 annual report with revenue of 410.

11 ppm, an increase of 29 in ten years.

61%; net profit attributable to mother 43.

64 ppm, an increase of 35 in ten years.


Performance exceeded expectations.

  Thermal power has severely reduced its losses in 18 years, and it is expected to turn losses into profits in 19 years.

18-year thermal power sector net profit -1.

0.6 billion, the previous actual reduction of 700 million losses, mainly due to the increase in volume and price, gross profit has improved significantly.

1) Ten-year revenue growth of 54.

14%: Benefit from the commissioning of additional units (2 million kilowatts of SDIC Beijiang Phase II in the first half of 2018 and 2 million kilowatts of Meizhou Bay Phase II in the second half of 2017) and utilization hours improvement (shortened thermal power utilization hours significantly increased 823 hours), Thermal power grid-connected power increases by 47 per year.

36%; Affected by the increase in the benchmark electricity price in 2017 and the narrowing of trading electricity discounts, thermal power prices rose by more than 3.


2) Costs increase by 44 per year.

62%: Cost increases are mainly affected by the increase in electricity and coal prices.

As the revenue growth rate is higher than the cost growth rate, the gross profit margin of thermal power increased significantly from 6% in 17 years to 12% in 18 years.

We expect the thermal power utilization hours in 19 years to continue to increase, overlapping coal prices to decline, and the thermal power sector is expected to turn losses into profits.

  The policy benefits were reduced, and hydropower performance exceeded expectations.

Yalong River Hydropower has a net profit of 72 in 18 years.

8.5 billion, an annual increase of 5.

72%, in the case that the expected repayment has not yet occurred (increased tax rebates in 18 years decreased by 6 compared with 17 years.

2.6 billion), the performance exceeded market expectations, the growth in performance was mainly due to the significant increase in electricity prices (18 to 0.

277 yuan / kWh, an increase of 5 per year.

32%). The reason for the increase in electricity prices is that the government has reduced its profit provision significantly and the transaction electricity discount has narrowed.

In addition, Dachaoshan benefited from the reduction of policy-based concessions, and the electricity price in 2018 was 0.

188 yuan / kWh, an increase of 41 a year.

4%, 18-year net profit 9.1 ‰, an increase of 61 a decade ago.


  Risk warning: electricity demand is not up to expectations, coal prices rise more than expected

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