GCL Energy Technology (002015): Comments On The 22 Year Interim News

Event: the company released the 2022 interim report. In the first half of the year, the company achieved revenue of 5.030 billion yuan, a year-on-year decrease of 17.19%. Among them, the sales revenue of electric power and heat were 2.746 billion yuan and 1.892 billion yuan respectively, which were - 28.78% and + 16.63% on a year-on-year basis; The net profit attributable to the parent company was 387 million yuan, a year-on-year decrease of 22.3%; The net profit of deducting non attributable parent was 117 million yuan, down 73.37% year on year; The gross profit rate was 17.67%, down 6.93 PCT on a year-on-year basis; The net interest rate was 7,73%, with a year-on-year decrease of 3.76 PCT; EPS (diluted) 0.26 yuan / share, a year-on-year decrease of 29.36%; Roe (weighted) was 4.71%, which was -3.99pct.

Fuel prices remained high, gross profit declined slightly after the first quarter, and clean energy business was still under pressure. Affected by the continuous high price of natural gas and coal, the company completed the settlement of 7.1082 million tons of steam, 4891 million kilowatt hours of settlement electricity, and 1.0183 million tons of waste disposal volume in the first half of the year, which decreased by 13.04%, 35.28% and 3.79% respectively year-on-year. The total installed capacity of grid connected power grid is 3807.24mw, including 2437.14mw of gas turbine cogeneration, 862.1mw of wind power, 60MW of biomass power generation, 116MW of garbage power generation and 332mw of coal-fired cogeneration, with 91.28% of clean energy installed.

According to the survey summary of public investors, the company's new installed capacity of clean energy in 2022 is about 200MW, including Gaochun gas turbine project in Jiangsu Province, Chaoyang wind power project in Liaoning Province and Fengfeng typhoon power project in Anhui Province. It is estimated that the installed capacity will be about 1000-1500mw from 2022 to 2024, of which wind power projects account for about 50% and gas turbine projects account for about 40%, Waste power generation and other projects account for about 10%. It is planned that the company's new installed capacity will be about 2.5gw in five years. The first goal is to expand the scale and increase the installed capacity; Second, the structure should be optimized, and the proportion of renewable energy, especially the proportion of wind power projects, should be gradually increased to enhance the company's profitability and reduce the impact of fuel price fluctuations.

In addition, the company holds Zhejiang Jiande GCL pumped storage Co., Ltd., and has Jiande pumped storage power station project with an installed capacity of 2400mw. It is a pure pumped storage power station with daily regulation. Its main tasks are to undertake peak load regulation, valley filling, energy storage, frequency modulation, phase modulation, emergency standby and other tasks of East China power grid. At present, it is the largest pumped storage power station in East China. The project is also listed in the national sustainable medium and long term plan and the "14th five year plan" of Zhejiang Province. According to the notice on land occupation, inundation area and immigration population issued by Zhejiang Provincial People's Government on July 29, the project is expected to start construction within the year, and will further expand the scope and scale of the company's clean energy business.

In the first half of the year, the company invested RMB 3.74 billion in the R & D of electric vehicles in Hong Kong, increased the investment in R & D of RMB 4.54 billion in the R & D of electric vehicles in Hong Kong, increased the investment of RMB 4.74 million in the R & D of electric vehicles in Hong Kong in the first half of the year The announcement of 4 self-developed passenger cars changing to tram type was released; And complete the development and testing of various operation and scheduling platforms.

According to the company's announcement, 3.117 billion yuan of the 3.72 billion yuan raised by the fixed increase in 2021 will be used for the construction of the first phase of the power port project, mainly for the construction of 248 passenger car exchange stations and 47 heavy truck replacement stations. The layout area is mainly in Zhejiang, Jiangsu, Guangzhou and other places. Affected by the unexpected epidemic situation in 2022, the project is expected to be completed in 2023. On August 15, the company issued a fund-raising plan to raise 4.5 billion yuan by issuing convertible bonds to non-specific objects, of which 1.858 billion yuan was used for investment in GCL power port phase II project and 1.542 billion yuan was used for battery grade lithium carbonate plant construction project. For the second phase project, the company plans to carry out in Inner Mongolia, Ningxia, Shanxi, Shaanxi and other provinces, and plans to build about 86 heavy truck and 30 light commercial vehicle exchange stations by leasing sites, with a total of 116 power stations. The construction period of a single power station is 3 months, and the overall construction period of the project is 2 years.

According to the survey summary of public investors, the company's goal in 2022 is to build 300 power stations to serve about 30000 vehicles. At present, the project reserve through the investment decision-making committee has reached 150. The construction period of the project is generally 2-3 months, and another 2-3 months is for vehicle climbing. It is expected that the replacement power station will show a large-scale trend in the second half of the year. At the beginning of the year, the company set the goal of "the 14th five year plan" to build more than 6000 power stations and serve more than 500000 to 600000 new energy vehicles.

Driven by market demand and policies, the comprehensive energy service business has developed steadily. With the promotion of power reform and the increase of green power ratio, diversified forms and entities of electricity trading, as well as time-of-use pricing and other policies, have given all parties in the market room for regulation and profit. At the same time, the state and local governments have made great efforts to promote the development of energy storage and distributed green power, including virtual power plants, power distribution and distribution, and time-of-use pricing The comprehensive energy service business of electric vehicle swapping, demand side management, Carbon Asset Management and other businesses has developed rapidly and has a bright future.

In the first half of 2022, the market-oriented trading service power was 9.3 billion kwh, an increase of 27.01% compared with 7.322 billion kwh in the same period of last year; The cumulative production capacity of distribution projects is 1091mva, and the electricity sales market business in Zhejiang and Sichuan is growing rapidly; At the same time, all kinds of carbon neutral trading will be carried out in an all-round way, among which the green electricity and green securities trading power exceed 100 million kwh; It has the first-class qualification of "demand side management service organization", and the user side management capacity is more than 14 million KVA; More than 30 energy service projects such as energy storage distributed energy and Microgrid have been put into operation.

Profit forecast: it is estimated that the company will realize net profit of 1.037 billion yuan, 1.498 billion yuan and 2.199 billion yuan from 22 to 24 years, corresponding to PE 22.8x, 15.8x and 10.8x, and maintain the overweight rating.

Risk tips: the purchase price of natural gas and coal may be higher than expected; The demand for electricity and gas in the downstream may decrease; Comprehensive energy expansion business is not as expected; The development of electric vehicles is not as expected.