Jingneng Power (600578) Investment Value Analysis Report-Restoration and Forecast of Resilient Operating Advantages of Thermal Power Generation

Jingneng Power (600578) Investment Value Analysis Report-Restoration and Forecast of Resilient Operating Advantages of Thermal Power Generation

Quick release of installed capacity, large charge compensation and procyclical investment income jointly promote high flexibility in performance.
2021 net profit compound growth rate of 63.

3%; Estimated cheaper among power companies (2018P / B0.

9 times), it is estimated that it is expected to be restored through the return of operating advantages in the future; the index rate is attractive.
The yields in 2021 are 3 respectively.

8% / 6.

9% / 7.


Jingneng Group’s coal power business platform has prominent advantages in regional asset layout.

The company 杭州桑拿网 is the Jingneng Group coal power business platform, and the actual controller is Beijing State-owned Assets Supervision and Administration Commission.

The main business is coal-fired power generation and heat supply. At the end of 2018, it had 11.46 million kilowatts of installed capacity and 4.78 million kilowatts of installed capacity under construction. It is an important component of power in North China.

In 2018, the company’s power generation capacity was 49.3 billion kWh (+3.

1% year-on-year), achieving net profit attributable to mother 8.

900 million (+66.

Year-on-year growth of 9%).

The superiority of potholes and quasi-pithole plants is being restored.

In 2018, due to the impact of rising market electricity and coal prices, the company’s gross margin declined rapidly and ranked lower in the 杭州夜生活网 industry.

Considering that there is limited room for further improvement in the power marketization of Inner Mongolia, the supply and demand of the coal industry is over-developing, and the company’s operating advantages are expected to resume and drive improvement in gross profit margin.
Gross profit margin in 2021 is 18.

0% / 24.

1% / 25.


The company’s 2018 P / B is only 0.

9 times, which is relatively low among electric power companies. It is estimated that it is expected to be repaired with the return of operating advantages.

The installed capacity has grown rapidly, and investment income and charge compensation have added flexibility.

At present, the coal industry’s installed capacity growth is limited and the company’s remaining large number of projects are yet to be put into production.
Installed capacity will increase by 27 in 2021.

1% / 2.

4% / 8.

8%, great growth potential.

The company’s investment income is large and procyclical, and the recovery prospect is considerable.

Shijingshan Thermal Power shut down can enjoy 2 years of power generation plan compensation, is expected to 2019?
Contributions in 2020 2.


800 million net profit after tax, adding performance flexibility.

Dividend rates are becoming high blood pressure.

With the rebound of the industry boom and the breakdown of investment pressure, is it expected that 2019?The free cash flow ratio in 2021 is 7.



600 million, a clear improvement trend.

The company’s previously recognized dividends are expected to the company in 2019?
2021 dividend yield is 3.

8% / 6.

9% / 7.
4% started to have better appeal.

Risk factors: Coal prices are significantly higher than expected growth, pushing up costs; lowering of benchmark electricity prices drags down revenue; revenue exceeds expectations.

Investment advice: Expected company 2019?
Net profit in 2021 is 20.



86 ppm, an increase of 132 in ten years.

1% / 77.

5% / 5.

8%, the converted EPS is 0.



58 yuan, the current expected corresponding P / E is 10/6/5 times. Based on the company’s historical evaluation and comparable company forecasts, we give the company January 2019.

3x target P / B, corresponding to a target price of 4.

60 yuan, the first coverage given a “buy” rating.