20131115-巴黎银行证券-GUODIAN_T_E_Reverse_roadshow_takeaways_13页_2mb
报告摘要
GUODIAN T&E 1296 HK: Summary
Core Content
Guodian T&E (1296 HK) is a leading company in the air pollution control and renewable energy sectors in China, offering environmental protection and energy-saving solutions for coal-fired power plants, as well as solar and wind power EPC services. The report outlines the company's performance, growth drivers, and valuation, with a target price of HKD2.53 and a "BUY" recommendation.
Key Highlights
Market Performance
- Target Price: HKD2.53 (+18.9% change from prior target price of HKD2.13)
- Current Price: HKD2.15
- Upside: +17.8% from current price to target price
- Share Price Performance:
- 1 Month: +15.6%
- 3 Month: +21.5%
- 12 Month: +44.3%
- Market Cap: USD1,680 million
- 3m Avg Daily Turnover: USD2.5 million
- Free Float: 20%
- Major Shareholder: China Guodian Corporation (39%)
Growth Drivers
- Solar EPC: Expected to double in 2014 with a target of 1GW, driven by strong demand from the Guodian Group and China Merchant Solar. Solar module production will operate at full capacity, improving profitability and margins.
- Wind Power: Delivered 1,000 units in 2H13, with improved profitability due to cost reductions and internal component supply. The Chifeng wind farm started operations in 2013, contributing positively to margins.
- deSO2 EPC: Margins improved significantly in 2H13 to 18.5% (from 11.7% in 1H13), driven by the recovery of EPC margins and divestiture of loss-making concession projects.
- deNOx EPC: Continued growth expected with the company's deNOx catalyst production lines operating at full capacity, although revenue may be affected by reduced external sales.
Financial Projections
| Metric | 2013E (RMB m) | 2014E (RMB m) | 2015E (RMB m) |
|---|---|---|---|
| Revenue | 24,032 | 31,948 | 34,282 |
| Net Profit | 738 | 1,148 | 1,218 |
| Recurring EPS (RMB) | 0.12 | 0.19 | 0.20 |
| EPS Growth (%) | 1.8 | 55.6 | 6.1 |
| Recurring P/E (x) | 13.9 | 8.9 | 8.4 |
| P/B (x) | 1.0 | 0.9 | 0.9 |
| EV/EBITDA (x) | 8.4 | 6.8 | 6.4 |
Key Assumptions
- deNOx EPC: 36,588 MW (2013E), 56,526 MW (2014E), 26,827 MW (2015E)
- deSO2 EPC: 9,103 MW (2013E), 9,257 MW (2014E), 10,443 MW (2015E)
- Wind Turbine Delivery: 2,195 MW (2013E), 2,400 MW (2014E), 2,700 MW (2015E)
- Solar Power EPC: 500 MW (2013E), 1,000 MW (2014E), 1,210 MW (2015E)
Earnings Sensitivity
- 25bps interest rate increase impacts 2013E earnings by -4.0% and 2014E by -3.1%
- 1% change in solar EPC GPM impacts 2013E earnings by +4.7% and 2014E by +5.8%
- 1% change in wind power GPM impacts 2013E earnings by +6.0% and 2014E by +4.4%
- 1% change in deNOx EPC GPM impacts 2013E and 2014E earnings by +3.5%
Investment Thesis
Guodian T&E is the only sizable H share listed company in the air pollution control field, offering a unique position in the market. The company is well-positioned for growth due to:
- Government policy support for environmental protection and renewable energy
- Expansion into new businesses such as green power EPC
- Strong demand for deNOx and deSO2 solutions, with deSO2 profitability improving significantly
- Solar and wind power growth driven by favorable policies and increased EPC capacity
Catalysts
- Supportive government policy on environmental protection, energy conservation, and renewable energy development
- Successful expansion into new business areas, including green power EPC and water treatment
Risks
- Changes in government support policies could impact demand across all segments
- Slower-than-expected wind turbine delivery and lower-than-expected profit margins
- Failure in new business development, which may affect investor sentiment
Company Background
Guodian T&E is the largest environmental protection and energy saving solution supplier for coal-fired power plants in China, and a leading renewable energy solution supplier. It also operates in wind power and water treatment sectors.
Key Executives
| Name | Age | Tenure | Title |
|---|---|---|---|
| CHEN Feihu | 50 | 1 | Chairman |
| YE Weifang | 60 | 16 | Deputy Chairman |
Peer Valuation (Selected)
| Company | Mkt Cap (USD m) | Price (HKD) | P/E (2013E) | P/E (2014E) | P/E (2015E) | EV/EBITDA (2013E) | EV/EBITDA (2014E) | EV/EBITDA (2015E) | P/B (2013E) | P/B (2014E) | P/B (2015E) | ROE (%) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Guodian Technology & Envir-h | 1,681 | 2.2 | 13.9 | 8.9 | 8.4 | 13.1 | 10.1 | 9.3 | 1.0 | 0.9 | 0.9 | 7.7 |
| Fujian Longking -A | 2,315 | 33.0 | 35.5 | 32.7 | 29.1 | 26.7 | 20.0 | 17.2 | 4.7 | 4.2 | 3.8 | 8.2 |
| Beijing SPC Environmental-A | 2,115 | 24.2 | 59.4 | 38.8 | 35.0 | 5.8 | 5.1 | na | 1.9 | 1.7 | 1.4 | 10.6 |
| Simple Average (Domestic) | - | - | 52.4 | 36.6 | 30.8 | 33.8 | 24.3 | 21.2 | 4.7 | 4.5 | 3.9 | 11.5 |
Conclusion
The report maintains a BUY recommendation for Guodian T&E, citing strong growth potential in the coming years, especially in the solar and wind power sectors. Despite a 4.5% reduction in 2013E earnings due to project delays, the company is expected to see significant growth in 2014 and 2015, with a target price of HKD2.53. The revised DCF model assumes a WACC of 8.4% and a terminal growth rate of 3.5%. The valuation appears attractive, with a P/E of 10.5x for 2014E and a P/B of 0.8x, compared to peers trading at higher multiples.
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