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SDIC Power Holdings:H116power generation in line,with higher/lower hydro power/coal-fired generation

发布时间:2016-07-14    研究机构:瑞银证券

H116/Q216 power generation down 2%/4% YoY

According to SDIC Power's interim results, subsidiaries controlled by the companygenerated power of 51.1bn kWh on an accumulated basis in H116 (-1.97% YoY, -4.2% YoY in Q216), accounting for c43% of our full-year power generation forecast,largely in line with our expectation.

Stable hydro power growth but coal-fired power declined considerably

The company's hydro power generation increased 4.3% YoY in H116, with YalongRiver hydro power up 7.3% YoY (+3.9% YoY excluding the impact of new powergenerating sets). Hydro power generation increased 1.3% YoY in Q216, lower than13.3% in Q116, mainly due to the maintenance of Jinping-Sunan DC transmission line(outbound transmission channel for Yalong River) in April. Coal-fired power generationdeclined 12.4% YoY in H116 (-5.3% YoY in Q216). We estimate the company's H116implied annualized coal-fired capacity utilization hours are lower than 3,600,significantly lower than the average in 2015 (4,100 hours).

Incremental capacity and overseas projects to contribute earnings

The company's coal-fired power projects that are under construction are not affectedby the national policy to delay the addition of coal-fired power capacity; we expect atotal of 6GW coal-fired power capacity to be put in operation in 2016/17. In terms ofoverseas projects, the 660MW coal-fired power project in Indonesia will get on line in2017 and the first 588MW offshore wind farm project in UK will get on line in 2018.We believe these projects will significantly boost the company's earnings growthpotential and offset the downside risks of utilization hours.

Valuation: Maintain Buy rating

We maintain our Buy rating and sum-of-the-parts based PT of Rmb9.5.

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