Huaneng Power International (600011) Interim Review: Downward Fuel Costs Improve Performance and Optimize Thermal Power Leader’s Performance in Second Half

Huaneng Power International (600011) Interim Review: Downward Fuel Costs Improve Performance and Optimize Thermal Power Leader’s Performance 佛山桑拿网 in Second Half

The performance has improved, in line with market expectations. The company released its semi-annual report for 2019, and the company achieved revenue of 834.

170,000 yuan (ten years +0.

88%) and operating costs of 697.

350,000 yuan (one year -2.

85%), net profit attributable to mother 38.

20,000 yuan (one year +79.

11%), deducting non-net profit 34.

650,000 yuan (+79 for the whole year.

84%).

The company’s performance is basically in line with market expectations. The decline in coal prices is the main factor for the company’s performance improvement. In the first half of 2019, the unit fuel cost of the company’s internal thermal power plants was 223.

81 yuan / MWh, a decrease of 5 per year.

57%.

We believe that coal supply and demand will be relatively loose in the future, the central price of coal will fluctuate downward, and the profitability of thermal power will be significantly improved.

As a leader in the thermal power industry, with scale advantages and higher coal price elasticity, we expect the company’s EPS to be zero in 2019-2021.

36, 0.

45 and 0.

53 yuan, the current sustainable corresponding PE is 18 respectively.

2, 14.

4 and 12.

Three times, the company is the purest thermal power leader of A shares, maintaining the “recommended” level.

The coal supply and demand pattern is relatively loose, and the company’s fuel costs continue to fall. In the first half of 2019, the unit fuel cost of the company’s internal thermal power plants was 223.

81 yuan / MWh, a decrease of 5 per year.

57%.

Fuel costs for the first half of 2019 totaled 473.

18 ‰, the fuel cost in the first half of 2018 was 516 trillion, so the fuel cost in the first half of 2019 dropped by 8.
.

3%.

In the first half of 2019, the annual average closing price of Qinhuangdao Port Powered Coal (Q5500) was 605.

28 yuan / ton, down 8 before.

77%.

As a whole, the main targets and tasks of capacity reduction during the “Thirteenth Five-Year Plan” period of the coal industry have basically been completed. In June 2019, raw coal production increased.

4%, the overall supply and demand of coal is loosening margins, and thermal coal prices are returning to the green range in 2019.

The decline in power consumption growth and climate factors will affect the company’s power generation in the first half of the year. It is optimistic about the first half of 2019. In the first half of 2019, the company’s operating power plants in China will gradually complete 1,953 power generation according to the consolidated statement.

7.5 billion kWh, a decline of 6 per year.

15%.

The first is because in the first half of 2019, electricity consumption in the whole country increased by 5%.

0%, while power consumption in the first half of 2018 increased by 9.

The growth rate has dropped by 4%; the second is because of the climatic factors in the first half of the year, the power load dropped in the same period in 2018, and the middle and lower reaches gradually leaned towards abundance, and the improvement of hydropower led to the squeeze effect.
However, in the future, with the marginal improvement of coal prices, the peak of summer electricity consumption, and the daily increase in coal consumption by power plants, the company’s low base in the second half of 2018 is expected to significantly improve the company’s performance.
Risk reminder: Power demand is less than expected, coal price trend is less than expected, on-grid price reduction risk