【出版时间及名称】：2010年3月中国电力行业研究报告
【作者】：德意志银行
【文件格式】：pdf
【页数】：25
【目录或简介】：
Signs of relief, but outperformance unlikely with tariff hike uncertainties
We have observed positive signs for the sector, including 26% power demand
growth in Jan-Feb 2010, a 16% spot coal price decline and halving coal seafreight.
In addition, dry water flow depressed hydro plant output and boosted
thermal plants’ utilization rate. We raise FY10E demand growth from 12% to 15%.
However, tariff hike uncertainty will likely weigh on share prices and the spot coal
price is still 15% above the contract price. We prefer to play the strong power
demand recovery theme on power equipment names rather than IPPs.
Deutsche Bank AG/Hong Kong
All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local
exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. Deutsche
Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm
may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1.
MICA(P) 106/05/2009
Recommendation Change
Top picks
China Resources Power (0836.HK),HKD16.52 Buy
Companies featured
Datang Int'l Power (0991.HK),HKD3.65 Hold
2008A 2009E 2010E
P/E (x) – 27.1 23.3
EV/EBITDA (x) 14.7 10.4 9.5
Price/book (x) 1.7 1.4 1.4
China Resources Power (0836.HK),HKD16.52 Buy
2008A 2009E 2010E
P/E (x) 44.5 13.9 14.6
EV/EBITDA (x) 18.0 9.4 7.6
Price/book (x) 2.3 2.0 1.9
Spot coal price
450
500
550
600
650
700
750
800
850
900
Datong 6,00kCal Shanxi 5,500kCal Shanxi 5,000kCal
Rmb per ton
Upcoming events Date
CR Power FY09 results
22 Mar 2010
Huaneng Power FY09 results
24 Mar 2010
Huadian Power FY09 results
29 Mar 2010
CPI FY09 results
2 Apr 2010
Global Markets Research Company
FY09 earnings preview
China IPPs should post a strong turnaround in FY09 earnings, as they returned to
profit making in 2009 after a decrease in the coal price. We expect CR Power to
report a NP of HK$5,283m on 22 March and Huaneng Power to report a NP of
HK$5,488m on 24 March, 7% and 8% higher than market consensus, respectively.
Key items to watch include China IPP guidance on the contract coal price hike and
volume, utilization outlook, capex and the likelihood of a tariff hike.
Base case assumptions
We have raised our assumptions for the coal price (up 8-11% in 2010E); tariffs (a
~3-5% tariff hike in July 2010); and utilization hours (up 5% in 2010E and 3% in
2011E). If the government does not raise tariffs in 2010, then IPP 2010E earnings
should decrease ~10-100% (CR Power and Huadian Power are the least and most
sensitive to tariff hikes, respectively). For every 1ppt decrease in unit fuel cost
over the base case, China IPP 2010E earnings should increase 4-36%.
We prefer equipment players to IPPs on strong demand recovery theme
We expect higher utilization rates for China IPPs on higher power generation
growth, but the higher contract coal price and uncertainty of an on-grid tariff hike
should continue to weigh on share price performance. We thus prefer the play on
power equipment makers with more thermal equipment delivery expected for
2011-12, as power market oversupply should be less of a concern for the
government. We reiterate Buy ratings on on Shanghai Electric and Dongfang
Electric (please see our sector note on 23 Feb).
Changing ratings, price targets and estimates for several companies
Over the last six months, the IPP sector underperformed HSCEI by 13-18%. We
believe downside potential for IPPs has been priced in. With the recent decline in
the spot coal price and sea-freight rates, we see moderate fundamental relief for
the sector. Hence, we upgrade Datang and Huadian to Hold. We maintain Buy on
CR Power, as we believe it is the most resilient play due to its stronger profitability
(partly thanks to plant location), captive coal mines and lower gearing. We maintain
Hold on Huaneng and CPI, as we expect their share prices to remain range-bound
until we see stronger visibility of an on-grid tariff hike.
DCF-based target prices; major risk is uncertainty of tariff hike
We value the sector on DCF, assuming WACCs of 8.9-9.8%. For companies with
non-power businesses, we use sum-of-the-parts to derive their target prices. Key
risks include volatility in coal prices, utilization rates, capacity addition plans and a
tariff hike. This report changes ratings, target prices, and/or estimates for several
companies under coverage. For a detailed listing of these changes, see Figure 13.