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长江电力
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电力、煤气及水等公用事业
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2011-05-16
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7.33
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6.44
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56.93%
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7.28
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-0.68% |
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7.28
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-0.68% |
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详细
Upgrade to OW: We raise our earnings forecast toincorporate the contribution of the 18 injected units. Withhigher earnings estimates, a 15% sell-off since therestructuring (vs a 9% rise in the market) and anexpected 3%+dividend, we move to OW. This is anattractive business: as the world’s largest hydropowerplayer, CYP’s 2010 unit operating cost was only 42% ofthe average of hydropower and 10% of thermal playersin China. At 16x 2011E and 15x 2012E EPS vs. a peergroup average of 25x and 21x, respectively, valuationlooks attractive. Coming asset injection to ensure long-term growth:Yangtze’s parent, the Three Gorges Group, plans tobuild another four large hydropower stations along theJinsha River, with total capacity twice that of Yangtze’send-2010 installed capacity of 21 GW. Of these, theXiangjiaba and Xiluodu stations have begunconstruction and are due to be completed by 2015. Theparent company has promised to inject these assets,which would ensure Yangtze’s long-term potential. Tariff with upside potential: CYP’s tariff isbenchmarked to the average provincial on-grid tariff,which increased by 5.2% CAGR from 2006-09 withoutany corresponding tariff hike for TG units. As coal priceincreases lead to a rising tariff benchmark, we seegreater scope for CYP to ask for a rise in its tariff. What is new: CYP’s 2010 & 1Q11 results were robust,with net profit of Rmb8.2bn in 2010 and Rmb648mn in1Q11, up by 78% and 445% YoY. The managementsbought ~203k shares in March, reflecting theirconfidence in the name. We expect the potential assetinjection, tariff hike and successful penetration into newbusinesses to serve as share price catalysts.
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