Lehman对华电国际的价值评估报告(1)

1StockOverviewReuters1071.HKBloomberg1071HKADR-HSCE4,504.68Performance1M3M12MAbsolute%4.010.64.0Rel.Market%5.17.1-17.252WeekRange3.38-1.9925/10/04ONDJFMAMJJASONDJFMAMJJASO1.401.601.802.002.202.402.602.803.003.203.40x10-44.505.005.506.006.507.007.508.008.509.009.5010.00HUADIANPOWERINTL.'H'K:SHPO/HKHCHIE(R.H.SCALE)Source:DATASTREAM25/10/04x10-4CHINAUtilitiesAsiaUtilitiesOctober26,2004HuadianPowerInternational(HK$2.53)1-OverweightChangeinRecommendationThewinnerin2005EQUITYRESEARCHIvanLee,[e-mail]mmaryMarketCapHK$(m)13,797Proj5-YrEPSGrth(%)21.5SharesOutstanding(m)5,256.1ROE03A(%)10.4DividendYield(%)1.90BVPS03ARMB1.73ConvertibleNoDebt-to-Capital03A(%)48.50ShareperADR-EV/EBITDARel.to5-YrDisclosure(s)EBITDACAGR6.12InvestmentConclusion
TheendofShandong’soversupply,rock-bottomplantutilisation,strongcapacitygrowth,andmorelow-costunitscomingonlinehaveconvincedustobecomemorepositiveonHuadian.Summary
Fuelcostriskmaybefading,butriskofimminentoversupplyisincreasingduetoextrasupplyfrom“unregulated”projectsunderconstruction.
Huadianiswell-positionedtohedgeagainsttheoversupplyriskgivenitsrock-bottomplantutilisation,morelow-costunitscomingonboard,competitivetariff,andstrongcapacitygrowth.
FactoringinagreaterFY04unitfuelcostrise,to19.3%from17%,FY04EPSare6.5%belowconsensus,whileFY05’sare9.8%higher.
FY05consensusEPSforecastsareclimbing.
Managementstyleonachange,transparencyhasbeenimproving;outperforminglately.
TargetraisedtoHK$3.0(14xFY05EPER).FYDec2003A2004E2005E2006ECurrencyRMBActualOldNewOldNewOldNewRevenue(m)8,065.810,127.210,127.212,217.312,217.314,074.714,074.7NetProfit(m)912.51,010.51,053.01,307.01,333.01,802.91,808.1EPSFY0.200.190.200.250.220.340.30EPSgrowth(%)-13.01.111.935.6DPS0.060.050.060.08P/E(x)13.313.111.78.7Div.yield(%)2.11.92.43.2CompanyRatingTarget(HK$)New:1-OverweightNew:3.00Old:2-EqualweightOld:2.80SectorView:2-NeutralUpsidetoTarget%20LehmanBrothersdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.CustomersofLehmanBrothersintheUnitedStatescanreceiveindependent,third-partyresearchonthecompanyorcompaniescoveredinthisreport,atnocosttothem,wheresuchresearchisavailable.Customerscanaccessthisindependentresearchat(S)CERTIFICATION(S)ONPAGE10ANDIMPORTANTDISCLOSURESBEGINNINGONPAGE11UtilisationinShandongisexpectedtorise,buckingthetrendoftheothersHuadian’s9M04operatingresultshaveshownthebottomingofplantutilizationin1H04withimprovementsof1-7pptsq-o-qineachofHuadian'spowerplantsinShangdong.Thistrendisconfirmedbythe9MoperatingresultsfromHuaneng,whichreporteda1-2pptsq-o-qriseinplantutilizationforitsthreepowerplants(Dezhou,JiningandXindian),whichspelltheendofShandong’soversupplysince2002.2EQUITYRESEARCHGoingforward,Shandongisexpectedtoadd600MW,1,500MWand1,600MW(or4,000MWifincludingunapprovedprojects)for2004-06,representinggrowthof2%,5%and5-12%,from30,495MWatend-2003.Onthebackofreported18.5%yoypowerconsumptiongrowthin9M04andexpected17%,14%,13%demandgrowthfor2004-06,powersupplyinShandongisexpectedtotighten.Unliketheothers,runningatexcessive72-75%utilizationinpowershortageareasthataresubjectedtodownwardadjustmentrisk,with90%ofcapacitylocatedinShandong,Huadian’srockbottom57%utilizationislikelytoimprovegraduallyandtorecoverthe63%levelachievedin2001,whenthemarketwasrelativelybalancedinsupplyanddemand.PowersupplyanddemandinShandong,Huadian’s90%capacitylocated0%5%10%15%20%25%19971998199920002001200220032004f2005f2006f2007f2008f-5,00010,00015,00020,00025,00030,00035,00040,00045,000Installedcapacity(MW)CapacitygrowthDemand/generationgrowthOversupplyinShandongsince2002Tighteningofsupplystartedin2H04Source:LehmanBrothersestimatesPlantutilisationYeartodateInstalledcapacitybyend-04Huadian'sstake1H033Q03FY031H043Q04FY04EFY05EFY06EZouxian2,540100%55%54%53.7%54.2%54.7%54.9%58.9%60.1%Shiliquan1,270100%60%57%55.0%50.5%53.2%53.7%58.8%60.0%Laicheng*1,200100%58%57%52.8%53.9%55.7%55.2%59.2%60.4%Qingdao66055%62%60%59.2%57.2%61.6%62.0%66.6%67.9%Weifang66030%52%54%55.7%56.9%60.6%59.2%63.5%64.8%Zibo*447100%62%58%58.7%52.1%57.0%56.9%62.8%64.0%Zhangqiu27070%54%56%55.9%50.4%53.7%53.8%57.8%58.9%Tengzhou*33354.49%70%67%64.7%49.6%52.4%54.1%58.0%59.2%Guangan*1,20080%78.2%70.0%70.6%69.1%69.1%Totalcapacity8,580Attributablecapacity7,34857%56%55.0%55.4%57.0%56.0%59.9%61.7%*Newcapacityaddedduringtheperiod;Guanganunit4(300MW)isexpectedtobecommissionedin4Q04Source:CompanyandLehmanBrothers3EQUITYRESEARCHIPP’splantutilisationforecast50%55%60%65%70%75%19971998199920002001200220032004f2005f2006f2007f2008fNationalplantutilisation(includinghydro)DatangHuanengHuadianShortageBalancedover-supplyBalancedover-supplySource:companiesandLBestimatesHighestcapacitygrowthandutilisationimprovementprovidethehighestEPSupsideBasedontheannouncedandapp