20160420-光大证券香港-中广核新能源-01811.HK-Birth_of_New_Star_18页_837kb

报告摘要

CGN New Energy (1811 HK) Summary

Core Content

CGN New Energy is a subsidiary of China General Nuclear Power Corporation (CGN), now positioned as the parent's "sole global platform in non-nuclear clean and renewable energy." It was originally established in 1995 as a subsidiary of Public Service Enterprise Group Inc and fully acquired by CGN in 2010. Listed on the HKEx in 2014 and renamed in 2015, CGN New Energy has undergone significant restructuring through asset injections from CGN, which include wind and solar power projects.

Main Points

Strategic Restructuring: CGN New Energy has been restructured to focus on non-nuclear alternative energy, with a significant increase in wind and solar power capacity.
Asset Injections: In 2015, the company acquired 16 wind farm projects and 6 solar farm projects with an installed capacity of 1,201MW and 181MW respectively, for a total of Rmb3,966m. Further asset acquisitions are planned to reach 1.6-3.6GW by the end of 2018.
Revenue Mix Shift: The revenue profile has shifted significantly, with wind and solar power expected to increase from 3.0% and 1.3% in 2015 to 9.9% and 6.8% in 2016, and 10.1% and 7.0% in 2017.
Operating Profit Share: The operating profit share from wind and solar power is expected to increase from 6.9% and 4.5% in 2015 to 17.4% and 18.9% in 2016, and 18.0% and 19.8% in 2017.
Valuation: The company currently trades at a FY16 P/E of 6.0x, below the industry average of 9.0x. The target price is set at HK$1.48 based on DCF analysis, representing a 8.8% upside potential and a FY16 P/E of 6.5x.
Financial Metrics: The company has a high net gearing position (255.5% in FY16), which may limit its financing options for further M&A activities. High finance costs and currency risks are also noted.

Key Information

Investment Summary

Turnover (US$m): 1,380 (2014), 1,152 (2015), 1,064 (2016E), 1,011 (2017E), 1,072 (2018E)
Growth (%): 30.8 (2014), -16.5 (2015), -7.6 (2016E), -5.0 (2017E), 6.0 (2018E)
Net Profit (US$m): 202 (2014), 104 (2015), 125 (2016E), 108 (2017E), 101 (2018E)
Growth (%): 262.3 (2014), -48.6 (2015), 20.4 (2016E), -13.7 (2017E), -6.6 (2018E)
EPS (US$): 0.06 (2014), 0.02 (2015), 0.03 (2016E), 0.03 (2017E), 0.02 (2018E)
Growth (%): N/A (2014), -59.5 (2015), 20.4 (2016E), -13.7 (2017E), -6.6 (2018E)
PER (x): 2.9 (2014), 7.2 (2015), 6.0 (2016E), 7.0 (2017E), 7.4 (2018E)
OCF/Share (US$): 0.05 (2014), 0.04 (2015), -0.02 (2016E), 0.04 (2017E), 0.01 (2018E)
P/B (x): 1.06 (2014), 1.01 (2015), 0.95 (2016E), 0.98 (2017E), 1.02 (2018E)
EV/EBITDA (x): 16.5 (2014), 21.5 (2015), 18.7 (2016E), 19.4 (2017E), 19.2 (2018E)
DPS (US$): 0.00 (2014), 0.00 (2015), 0.01 (2016E), 0.01 (2017E), 0.01 (2018E)
Yield (%): 0.00 (2014), 2.52 (2015), 2.86 (2016E), 2.86 (2017E), 2.86 (2018E)

Shareholding Structure

CGN: 72.3%

Recent Performance

Absolute Performance (%): 0.0 (1M), -20.0 (YTD), -52.4 (12M)
Relative to HSCEI (%): -4.1 (1M), -15.7 (YTD), -18.0 (12M)

Asset Injection

Wind and Solar Power: The company has injected wind and solar power projects from CGN, increasing its installed capacity to 5,065MW as of December 2015.
Revenue and Profit Shift: Wind and solar power now contribute a significant portion of the company's revenue and operating profit, with a shift from traditional power sources like gas, coal, and oil.

Financial Analysis

Net Profit Growth: Net profit growth is expected to be hindered by high finance costs and reduced utilization hours of gas-fired power in Korea due to nuclear power expansion.
Net Debt/Equity: Increased from 224.1% in 2015 to 255.5% in 2016, and projected to rise further to 304.0% and 366.8% in 2017 and 2018 respectively.
DCF Valuation: Target price set at HK$1.48, representing a 8.8% upside and a FY16 P/E of 6.5x.

Valuation Comparison

Peer Comparison: CGN New Energy's FY16 P/E is below the industry average, with wind power peers averaging 8.8x and solar power peers averaging 9.0x.
Sensitivity Analysis: Equity value per share is sensitive to changes in WACC and terminal growth rates.

Risks

Power Utilization Hours: Potential significant decrease in utilization hours for wind and solar power in China due to power rationing.
Utilization Hours in Korea: Sharp decline in utilization hours for gas and oil-fired power due to expansion of nuclear power.
Finance Costs: High finance costs may hinder net profit growth if interest rates rise.
Currency Risk: The company operates in both China and Korea, exposing it to currency fluctuations.

SWOT Analysis

Strengths: Strong parent support, strategic restructuring, and focus on non-nuclear clean energy.
Weaknesses: High net gearing, potential for dilutive acquisitions, and high finance costs.
Opportunities: Expansion of alternative energy projects and increasing demand for clean energy.
Threats: Power rationing in China, nuclear power expansion in Korea, and currency fluctuations.

Corporate Development History

1995: Established in Bermuda as an indirect subsidiary of Public Service Enterprise Group Inc.
2000: Acquired by CGN as an indirect subsidiary.
2014: Listed on the HKEx.
2015: Completed acquisition of wind and solar projects and renamed to CGN New Energy Holdings Co Ltd.

Top Management

Mr. CHEN Sui (Chairman): Over 27 years of experience in strategic planning, renewable energy development, and management. Holds degrees in engineering and management.
Mr. LIN Jian (President): Rich experience in the power industry. Holds degrees in engineering from Huazhong University of Science and Technology and the University of Electro-Communications in Japan.

Conclusion

CGN New Energy is undergoing a significant transformation to become a leading non-nuclear alternative energy player. The company's strategic asset injections and restructuring are expected to enhance its clean energy profile. However, it faces challenges including high finance costs, potential dilution from future acquisitions, and risks related to power utilization and currency. The DCF valuation suggests a target price of HK$1.48, indicating potential upside for investors.

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