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Yangtze Power (600900): The water supply is dry in the second half of the year + Chuanyun Company’s supplementary discount is terminated and the net profit is gradually adjusted slightly

Yangtze Power (600900): The water supply is dry in the second half of the year + Chuanyun Company’s supplementary discount is terminated and the net profit is gradually adjusted slightly
Event: On January 16, the company announced the 2019 performance report, so that the company realized operating income of 498.86 ‰, at least -2.59%; net profit attributable to mother 215.600,000 yuan, at least -4.65%; deduct non-net profit 211.59 ‰, at least -4.06%. In the second half of the year, the water was dry, and the power generation was increased and replaced in advance.33% leads to an average of 2.59%.(1) Incoming water: The inflow of Xiluodu Reservoir is half dry for half a year19.At 75%, the amount of water from the Three Gorges Reservoir has been dry for many years5.59%,其中,溪洛渡水库来水量3Q19\4Q19 分别同比-29.45% /-19.76%,三峡水库来水量3Q19\4Q19 分别同比-16.98%\+0.80%.(2) Power supply shift due to running water shortage: gradually accumulate 210.5 billion kWh (-yoy 2).33%), of which 1251 billion kWh was generated in the second half of the year, which is longer every year6.78%.Breakthroughs in power generation have led to a breakdown of operating income.59%. The lowest net profit attributable to mother is -4.65%, which is higher than the growth rate of profit maximization, which is due to Chuanyun’s earnings discount expiring in 2018.Chuanyun Company operates Xiluodu, Xiangjiaba Hydropower Station, and enjoys a “three exemptions, three halvings” policy. The policy has expired in 2018. From 2019, the company only enjoys the benefits of the western development, which means that the profit rate will be 75%% Rose to 15% in 2019.Affected by this, the net profit attributable to mothers decreased.65% (Note: The maximum profit is affected by the increase in power generation, every so often).42%) 48.9.8 billion acquired 23% equity of Jinzhong Company, seeking joint dispatch with Jinsha River Midstream Hydropower Station.On December 31, 2019, the company started with 48.9.8 billion yuan acquisition of 23% equity of Jinzhong Company sold by Datang Yunnan. After the completion of the acquisition, the company will become the second largest shareholder of Jinzhong Company (Note: Huadian Yunnan holds 56%, Huaneng Hydropower holds 11%, YunnanProvincial Power Distribution Co., Ltd. holds 10% of the shares).The Jinsha River midstream is planning to build a reservoir of eight-level hydropower station. At present, a reservoir of six-level hydropower station has been completed. Among them, Jinzhong Holdings Liyuan (installed 2 million kilowatts), Ahai (installed 2.4 million kilowatts) hydropower station, shares in another four-tier hydropower station;Two families are waiting to be developed.The company plans to use Jinzhong Company as the entry point to promote the joint dispatch of the Jinsha River downstream hydropower station (Xiluodu, 都市夜网 Xiangjiaba, Wudongde, Baihetan) and the Jinsha River middle reaches of the first reservoir. Investment suggestion: Maintain “Buy” rating.The company focuses on the main hydropower business and expands the development space across the power distribution business and the capital market.The company’s hydropower assets use the “group investment and construction, built-in injection” model. The isolation of financing and debt has brought stable returns and abundant free cash flow to listed companies, ensuring the sustainability of high cash dividends.We expect the company’s net profit attributable to its parent to be 225 in 2019-2021.17, 232.06, 235.4.5 billion, a ten-year growth rate of -0.4%, 3.1%, 1.5%, corresponding to the PE estimate of 17 on January 17.3, 16.8, 16.6x, maintain “Buy” rating. Risk Warning: The Peruvian government 北京夜网 approves the risks, the electricity grid price is lowered, the water supply is dry, and the market absorbs the risks.