Huaneng International (600011): Falling coal prices, significant profit elasticity, 2019H1 return to net profit increased by 79%

Huaneng International (600011): Falling coal prices, significant profit elasticity, 2019H1 return to net profit increased by 79%

Benefiting from the decline in coal 杭州夜网论坛 prices, net profit attributable to mothers increased by 79% in the first half of 2019. In the first half of 2019, the company realized revenue of 83.4 billion yuan, a growth rate of 0.

88%; net profit attributable to mother 38.

2 ‰, an increase of 79% in ten years; net profit of non-attribution to mothers is 34.

6 ‰, an increase of 80% in ten years; of which, non-net profit was deducted 24 in the first quarter.

800 million, deducting non-net profit 9 in the second quarter.

800 million.

The increase in company profits was mainly due to a 5% decrease in unit fuel costs.


Although the utilization hours are reduced, the coal price is lower and the profit is more elastic. The utilization hours, electricity prices, and coal prices are the three core factors that affect the profitability of thermal power.

Utilization hours ↓: Expected coal, hydropower input and other reasons in coastal provinces, the growth rate of thermal power generation accelerated, the company’s Zhejiang, Guangdong, Shanghai, Fujian, power generation decreased 18%, 25%, 16%, 25%.

Overall, the charge sold by the company in the first half of the year was inserted.

6%, holding installed capacity increased by 1.

6%, using hours to reduce interest rates.


Electricity price ↑: In the first half of 2019, the market transaction electricity price slightly increased, and the company’s average online settlement electricity price gradually increased to zero.

22%, the combined second quarter budget cuts, and the average tax-deductible income increased by 1.


Coal price ↓: In the first half of 2019, the national average thermal coal index was 501 yuan / ton, at regular intervals6.

8%; the company’s main installed areas such as Shandong, Jiangsu, Zhejiang, Guangdong and other places, the coal index is located at 6.

3%, 10.

2%, 5.

2%, 9.

Affected by this, the company’s unit fuel cost of electricity sales in the first half of 2019 dropped by 5.


The leading coal-fired power company in the country benefits from the high elasticity of falling coal prices. Assume that the average price of the company’s coal purchase in 2019-2021 (converted to 5,500 kcal) will be 50/70/90 yuan / ton lower than in 2018. The company’s EPS for 2019-2021 is expected to be0.



62 yuan.

The company is a leading domestic thermal power company with excellent unit quality and significant geographical advantages.

The remaining downward pressure on the high inventory coal prices of power plants has been increased from 16% to 13%, allowing the company to increase profits. The company’s profit is expected to rebound, and the company’s ROE is expected to increase to 6 in 2019.

0%, combined with the company’s historical assessment, give A / H shares a 2019 PB 1.


0 times, corresponding to the reasonable value of A / H shares 8.

5 yuan / share, 6.

6 Hong Kong dollars / share, give A / H shares a “buy” rating.

Risk warning: coal price rise risk; electricity demand is less than expected; electricity price reduction risk

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