Huaneng International (600011): Volume and price increase to help 2018 profit improve 2019 outlook usher in cost-side price decline

Huaneng International (600011): Volume and price increase to help 2018 profit improve 2019 outlook usher in cost-side price decline

I. Event Overview The company released its 2018 annual report: 2018 operating income of 1,698.

6.1 billion, a 10-year growth of 11.

04%; Attributable net profit 14.

3.9 billion, a decrease of 17 previously.

42%; EPS is 0.

07 yuan, a decrease of 36 per year.


Second, the analysis and judgment of the domestic power plant’s annual power generation ranks first in the domestic industry comparable companies, thermal power leading advantages are prominent.

Net profit attributable to mothers in 20厦门夜网 1814.

3.9 billion, EPS is 0.

07 yuan.

Operating income was 1,698.

6.1 billion, an annual increase of 11.

04%, in line with the consensus forecast; net profit attributable to shareholders of listed companies14.

2 billion, an increase of 215 in ten years.


In 2018, the company’s operating power plants in China gradually completed 4,304 power generation according to the consolidated statement.

5.7 billion kWh, an increase of 9 per year.

12%, the power generation ranks first among comparable companies in the domestic industry;

1.6 billion Gigajoules, an increase of 22 in the future.


The company’s thermal power technology is at the leading domestic level. The thermal power unit includes 14 of the world’s most advanced million-kilowatt-class ultra-supercritical units that have been put into operation. Its utilization hours are ahead of most regional averages.

As a power generation enterprise that has been ploughing for many years, Huaneng International is able to give play to its advantages in developing and distributing regions through cooperation with key large mines, and effectively control the cost of fuel purchases in the face of high coal prices.

It is expected that under the circumstances that the overall central coal price of thermal coal prices will decrease in 2019, Huaneng International’s advantages as a leader in the power generation industry will become more prominent.

The proportion of installed structure cleanliness will gradually increase, and the more advanced thermal power units will benefit from the backward coal power generation phase-out plan.

As of December 31, 2018, the company had 105,991 MW of controllable power generation capacity and 93,755 MW of equity power generation capacity, ranking first among comparable companies in the domestic industry.

Among them, gas, hydropower, wind power, solar power and biomass power generation accounted for 16.

5%. In 2018, the company’s newly-produced generating units had a total generating capacity of 653 MW, all of which are low-carbon clean energy. The company’s installed structure cleanliness ratio has further increased.

More than 50% of the company’s thermal power units are large-scale units over 600,000 kilowatts, including 14 of the world’s most advanced million-kilowatt ultra-supercritical units that have been put into production.Backward coal power phase-out plan.
Revenue growth is due to both volume and price rises, and we expect the cost side to fall in 2019.

The improvement in revenue in 2018 was mainly due to the increase in electricity sales9.

3%, the average on-grid settlement electricity price increases by 1 every year.

08%, providing a brief increase of 22.

73%; operating costs increased by 11 in ten years.

06%, mainly due to the increase in unit fuel cost of electricity sold by domestic plants compared to the same period last year4.

85%, the total cost increased by 118 over the same period last year.

At 12 ppm, the annual fuel cost of coal prices increases by 20.

At 98 ppm, fuel costs have increased by 88.2.4 billion.

Affected by this, the net cash inflow from operating activities decreased by more than 3.

94%, first of all, the company’s current period’s increase in electricity and electricity prices brought about revenue growth offset by the impact of fuel cost growth.

In 2018, major changes in profits caused by the company’s non-main business were mainly caused by investment income and non-operating expenses. The net profit attributable to shareholders after deduction of non-non-operating income increased by 215.


The last two sessions of the two meetings ended, coal mines in Yulin area resumed production, coal pipe tickets in Inner Mongolia’s Zhungeer Banner region have been released, and the pressure of sales on the mines has interacted. The price of many coal mines has fallen by 20-25 yuan / ton.Truck thermal coal fell from 640-650 yuan / ton to 620-625 yuan / ton, and the cost pressure of thermal power companies has eased.

Under the background of sufficient coal supply in 2019, disturbance factors still exist, including coal mine safety inspections, environmental supervision, major conferences, and import coal replacement policies.In three years, we expect the cost of fuel at the cost side to fall in 2019.

Third, profit forecast and investment recommendations In future operations, the company’s cost side is mainly affected by coal prices and equipment utilization hours, the income side is mainly affected by electricity prices and electricity consumption, and the cost side mainly depends on future coal price trends.As the top leading company, the company has factories located in 26 provinces, autonomous regions and municipalities. Whether it is the growth of the demand side or the improvement of the cost side, the company has benefited from the target.

We estimate that the company’s operating income for 2019-2021 will be USD 1735, 1773, and 182.6 billion, and the net profit attributable to shareholders of the parent company will be 26.

5,43,600,000 yuan, the corresponding EPS is 0.

11, 0.

17, 0.

24 yuan / share, corresponding to PE, 47, 39, 29 times respectively, for the first time coverage, given the “overweight” 南京夜网rating.

4. Risk warnings 1. Thermal coal prices continue to rise; 2. National electricity consumption is less than expected; 3. Downward pressure on electricity prices.