Wenshan Power (600995): Wenshan Released Electricity Integration Company actively launched electricity distribution business

Wenshan Power (600995): Wenshan Released Electricity Integration Company actively launched electricity distribution business

Investment Highlights Yunnan 西安耍耍网 Wenshan sells integrated power company.

The company went public in 2004. It owns local power grid resources and is mainly engaged in the issuance of electricity business. It has approximately 110,000 kilowatts of small hydropower installed capacity. It mainly sells electricity and realizes its operations in Wenshan, Laoshan, Qiubei and FuningDirectly transmitted to five cities and counties, including Xichou; entrusted by Yunnan Power Grid to manage the assets of Maguan and Malipo Power Supply Bureaus in Wenshan Prefecture; to carry out Guangnan County in the state;趸, electricity sales services in the two counties of Napo.

The company realized a power supply of 49 in 2016-2018.

7, 55.

0 and 59.

800 million kWh, the company’s self-generation efficiency is high, the amount of additional stable about 600-700 million kWh /北京夜网 year, about 85% from the external purchase of provincial grid and local hydropower, external purchase of electricity accounted for a relatively high.

2018 results hit a new high.

The company’s 2016-2018 revenue was 18.

4, 20.

4 and 20.

30,000 yuan, an increase of -6 in ten years.

0%, 10.

8% and -0.

5%; net profit attributable to mother 1.

6, 1.

6 and 3.

0 million yuan, an increase of 54 in ten years.

5%, -1.

7% and 89.

0%.

2019Q1 achieved revenue 5.

600 million (+0.

47%), achieving net profit attributable to mothers1.

700 million (-7.

2%), although slightly lower, but due to the high base in 2018, the overall situation of water and power generation in the first quarter is still high, and the company’s overall performance has increased steadily.

The gross profit margins for 2016-2018 were 23 respectively.

0%, 26.

2% and 30.

0%, increase year by year; the cost rate is well controlled, with an average of about 12%.

Actively develop electricity distribution business.

In addition to the power issuance business, the company is actively engaged in related power survey and design and distribution of electricity services.

Holding Wenshan Wendian to carry out power design, survey and other business; holding Wendian Energy to carry out incremental power distribution and comprehensive energy services and other services; and shares in Shenzhen Qianhai Shekou Free Trade Zone Power Supply Co., Ltd.

The power distribution business has become an important business component and growth point of the company.

It is expected to benefit as the country reforms electricity and reforms.

The actual controller of the company is China Southern Power Grid, which is the only listed company platform of China Southern Grid. The assets under the group include high-quality assets such as Yunnan International. With the advancement of state-owned enterprise reform and power reform, the company may benefit.

Earnings forecasts and investment advice.

It is expected that EPS for 2019-2021 will be 0.

58, 0.60 and 0.

62 yuan, corresponding PE is 14X, 13X and 13X respectively; the company’s performance is better and it is the only listing platform affiliated to China Southern Network; for the first time, it is given an “overweight” rating.

Risk reminders: Downside risks of electricity prices; risks of fluctuations in incoming water; lower-than-expected risks of state-owned electricity reforms.