China Nuclear Power (601985) Review of 2019 Third Quarterly Report: Recent Profit Pressured Long-Term Growth Visible

China Nuclear Power (601985) Review of 2019 Third Quarterly Report: Recent Profit Pressured Long-Term Growth Visible

Event: China Nuclear Power released the third quarter report of 2019.

In the first three quarters of 2019, the company’s operating income was 3.39 million yuan, an annual increase of 20.

4%; net profit attributable to mother 36.

8 ‰, the ten-year average of 3.

1%.

The growth rate of power generation in Q3 is considerable: in the first three quarters of 2019, the company gradually generated 101.2 billion kilowatt-hours of commercial power generation, an increase of 19 over the same period.

1%.

In Q3 2019, the company’s power generation capacity was 36 billion kWh, an increase of 17 year-on-year.

0%, the growth rate is slightly higher than 2019Q2.

7 units.

We believe that the company’s 2019Q3 power generation growth rate exceeded the increase mainly due to the tail-warping effect of some new units being put into operation, maintenance and other factors.

Benefiting from the increase in power generation, the company’s operating income in the third quarter of 2019 was $ 11.9 billion, an increase of 16% year by year.

3%, an increase of 5 from the previous month.

8%.

Profits dragged down by the maintenance and repair of No. 2 unit of Sanmen: the company’s operating costs and management expenses, and financial costs increased in the long term in the third quarter of 2019.

We believe that the increase in the above costs and expenses of the company is mainly related to Sanmen Nuclear Power Unit 2.

Sanmen Nuclear Power Unit 2 spent on commercial transportation in November 2018; however, in the first three quarters of 2019, due to equipment defects, Sanmen Nuclear Power Unit 2 has been shut down for maintenance. In the third quarter of 2019, it did not contribute to power generation revenue, but costsAnd costs continue to accrue.

Although the company implemented an adjusted and optimized depreciation policy since 2019Q3, the company’s net profit attributable to the parent in 2019Q3 was 10 under the above impact.

9 ‰, a ten-year average of 11.

1%, year-on-year decline is the same as 2019Q2.

Construction of Zhangzhou Nuclear Power starts, visibility of future growth: On October 9, 2019, the company’s Fujian Zhangzhou Nuclear Power Unit 1 and Unit 1 obtained construction permits; on October 16, 2019, Zhangzhou Nuclear Power Unit 1 pours the first tank of the nuclear islandConcrete (FCD), the unit officially started.

The reactor type of Zhangzhou Nuclear Power Units 1 and 2 adopts an independent three-generation million-kilowatt pressurized water reactor nuclear power unit (“Hualong No. 1”), which is transformed into a “Hualong 深圳桑拿网 No. 1″ demonstration project.Construction started on May 7, 2015 and December 22, 2015, and the project construction is progressing smoothly.

With the restart of nuclear power projects, the company’s long-term growth space is visible.

Profit forecast and investment grade: It is estimated that the company’s net profit attributable to mothers for 2019-2021 will be 47.

5, 52.

5,57.

400 million, EPS is 0.

31, 0.

34, 0.

37 yuan, the current sustainable corresponding PE is 17, 15, 14 times.

Give the company 18 times PE in 2019, corresponding to a target price of 5.

58 yuan, the first coverage given “overweight” rating.

Risk warning: The on-grid electricity price exceeds the expected downlink, the utilization hours exceed expectations, and the risk of lagging in the resumption of production and maintenance of the generating unit is slow.