20210611-招银国际-新天绿色能源-00956.HK-Operating_performance_running_ahead_of_estimates_6页_1003kb

Suntien Green Energy (956 HK) Company Update Summary

Core Content Overview

Suntien Green Energy (956 HK) has reported strong operating performance in May 2021, surpassing both management guidance and previous estimates. The company's wind power generation reached 6.6TWh, representing a 50.2% YoY increase, and natural gas sales volume hit 1.91bn, up 12.2% YoY. These results suggest robust performance across both segments, which are expected to contribute significantly to the company's full-year earnings.

Key Performance Highlights

• Wind Power Generation:

  • May 2021: 1,430MWh, up 60.3% YoY.
  • 5M21: 6.6TWh, up 50.2% YoY.
  • FY21E wind generation expected at 12.8TWh, up 29.5% YoY.
  • Wind utilization hours lifted from 2,450 to 2,550 hours for FY21E.

• Natural Gas Sales:

  • May 2021: 240mcbm, up 36.7% YoY, reversing the seasonal trend.
  • 5M21: 1.91bn, up 12.2% YoY.
  • Management attributed the growth to tightened environmental controls pushing industrial users to switch from coal and heavy oil to natural gas.

Earnings Revisions

• Earnings Estimates:

  • FY21E net income revised up to RMB1,968mn, up 12.1% from previous estimates.
  • FY22E net income revised up to RMB1,994mn, up 4.8%.
  • FY21E earnings estimate is 9.6% higher than the consensus.

• Earnings Outlook:

  • FY21E earnings are expected to grow by 34.9% YoY.
  • The company's FY21E earnings estimate is RMB1,920mn, up 11.9% from prior assumptions.

Valuation and Target Price

• Target Price: HK$4.15, up from HK$3.26.
• Current Price: HK$2.91.
• Valuation Metrics:
  • FY21E P/E: 5.4x.
  • FY21E P/B: 0.73x.
  • Valuation is still below peers' average of 8.0x/0.8x for FY21E.
• SOTP Valuation:
  • Total equity value: RMB13,408mn.
  • Per share value: HK$4.15.
  • The valuation is based on a combination of DCF and PER methods.

Financial Summary

Operating Performance by Region

Key Ratios

Market Outlook and Catalysts

• The strong operating performance is expected to boost market sentiment.
• Short-term catalysts include:
  1. Reverse roadshow in late June.
  2. Strong 1H21E earnings.
  3. Upcoming events and promotions associated with the 2022 Beijing Winter Olympics.

Analyst Ratings and Disclaimers

• Rating: BUY (Maintain).
• Target Price: HK$4.15, representing a +17.8% upside from current price.
• Risks and Disclaimers:
  • The report is not investment advice and may not be suitable for all investors.
  • CMBIS does not guarantee the accuracy or completeness of the information.
  • The value of investments may fluctuate and is not guaranteed.
  • The report may be subject to conflicts of interest due to investment banking relationships.

Company Information

• Auditor: Ernst & Young.
• Analyst: Robin Xiao.
• Contact: (852) 3900 0849, robinxiao@cmbi.com.hk.
• CMBIS Affiliation: CMB International Securities Limited is a subsidiary of China Merchants Bank.

Legal and Regulatory Information

• The report is subject to specific disclosures and disclaimers for UK, US, and Singapore recipients.
• CMBIS is not a registered broker-dealer in the US and Singapore, and the report is intended for specific institutional investors.

Conclusion

Suntien Green Energy's performance in May 2021 exceeded expectations, leading to upward revisions in earnings and target price. The company's strong wind power generation and increased natural gas sales indicate positive trends and potential for further re-rating. The analyst recommends maintaining the BUY rating due to the company's robust financials and strategic advantages in the energy sector.