Qianyuan Power (002039) 2018 Annual Report Comments: Outstanding performance in the fourth quarter and continuous improvement in financial conditions

Qianyuan Power (002039) 2018 Annual Report Comments: Outstanding performance in the fourth quarter and continuous improvement in financial conditions
Event: Qianyuan Power released the 2018 annual report.Annual company operating income for 201823.9 ppm, 10-year average1.3%; net profit attributable to mother 3.7 ppm, an increase of 14 in ten years.8%; net profit deducted from non-return to mother 3.100 million, a reduction of 0 every year.3%; earnings per share 1.20 yuan.  2018Q4 performance was dazzling, driving performance growth: The company’s 2018Q4 return to its net profit was 0.7.5 billion US dollars, one year to achieve a loss (2017Q4 return to mother net profit -0.2.5 billion); net profit of non-attributed mother 0.2.7 billion, has previously achieved losses.We believe that the company’s fourth-quarter performance growth was mainly contributed by non-recurring gains and losses and power generation growth.In 2018Q4, the company received zero asset disposal income due to the land acquisition and storage of Shuicheng Power Plant.600 million, significantly improved performance.In addition, the company generated 21 in 2018Q4.600 million kWh, an increase of 61% per year.Affected by 2018Q4, the company’s annual power generation in 2018 decreased slightly several times.2%, compared with the first three quarters (ten-year growth rate -11.8%) ranking, the decline in power generation has narrowed; 2018 annual performance has increased by 14.8%, compared with the first three quarters (ten years of growth -15.1%) score, performance growth from negative to positive.  There is no plan to build a new hydropower station, and the financial situation continues to improve: Since 2016, the company’s hydropower units have all been put into operation, and there is no plan to build a new hydropower station in the future.With the repayment of debts during the construction period of the hydropower station, the company’s financial situation continued 成都桑拿网 to improve.We estimate that the company has an interest rate of 108 million in 2018, which has been reduced by 2 times.80,000 yuan, a decrease of 4 from the first three quarters.400000000.The company’s asset-liability ratio in 2018 was 71.5%, decrease by 2 every year.Six averages, a decrease of 0 from the first three quarters.2 units.The company’s financial expenses for 2018 5.5 ‰, a decrease of 4 per year.4%; comprehensive financing cost 5.0%, a decrease of 0 per year.1 average.As the company’s financial situation continues to improve, the reduction in financial expenses will have a positive impact on the company’s performance.  Earnings forecast and investment rating: Taking into account changes in the company’s operating conditions and other factors, the earnings forecast is lowered. It is expected that the company’s net profit attributable to the parent in 2019 and 2020 will be 3 respectively.7, 4.0 ppm (3 before adjustment.9,4.200 million), plus the projected net profit for mothers in 20214.300 million.The company’s EPS for 2019-2021 is expected to be 1.21, 1.30, 1.40 yuan, corresponding PE is 12, 11, 10 times.The company’s earnings will benefit from the continuous improvement of its financial position and maintain its “overweight” rating.  Risk reminders: the risk that the incoming water will exceed the expected reduction in the amount of power generation, the risk of a decrease in on-grid electricity prices and the decline in electricity revenues, and the risk that the hydropower generation rights transaction will drag down the company’s revenues.