ZMNY(600163) 长江证券·2024-10-28 08:40Investment Rating - The report assigns a "Buy" rating to Zhongmin Energy (600163 SH) with a first-time coverage [4] Core Views - Zhongmin Energy is one of the twin stars of provincial power companies under Fujian Investment Group, focusing on new energy power generation [4] - The company has experienced rapid growth in installed capacity and revenue, with cumulative increases of 119 31% and 224 65% respectively from 2018 to 2023 [4] - Despite excellent profitability, the company's valuation remains at the lower end of the industry due to concerns over growth trajectory and quality [4] - The report expects a more rationalized bidding scheme and improved electricity prices for offshore wind projects in 2024, potentially boosting returns [5] - The parent group has abundant high-quality resources, and asset injections could significantly enhance Zhongmin Energy's growth prospects [6] Company Overview - Zhongmin Energy was established in 1993 and went public in 2015 through a backdoor listing, becoming a key new energy power generation platform in Fujian Province [12] - The company's installed capacity has grown from 436 5 MW in 2018 to 957 3 MW by H1 2024, with offshore wind accounting for 30 92% of total capacity [13] - Offshore wind, despite its smaller share in installed capacity, contributed 63 40% of the company's net profit in 2023 [4] - The company's ROE reached 10 85% in 2023, outperforming the new energy power generation sector by 2 06 percentage points [4] Market Performance - Zhongmin Energy's stock price closed at 5 18 yuan on October 22, 2024, with a total market capitalization of 190 3 million shares [2] - The company's 12-month high and low prices were 5 56 yuan and 3 33 yuan, respectively [2] - Over the past 12 months, Zhongmin Energy's stock performance has outperformed the CSI 300 Index, with a 29% increase compared to the index's 13% [3] Growth Drivers - The report forecasts that Zhongmin Energy's net profit will reach 734 million yuan, 1 019 billion yuan, and 1 114 billion yuan in 2024, 2025, and 2026, respectively [7] - The company's EPS is expected to be 0 39 yuan, 0 54 yuan, and 0 59 yuan for the same period, with corresponding P/E ratios of 13 43x, 9 68x, and 8 85x [7] - The parent group's commitment to asset injections, including offshore wind and pumped storage projects, could significantly boost the company's future growth [6] Industry Analysis - Fujian Province boasts some of the best wind resources in China, with annual equivalent full-load hours ranging from 2,200 to 3,800 hours, significantly higher than the national average [24] - The province's wind power utilization rate has consistently remained at 100%, with no curtailment issues [25] - The report highlights that Zhongmin Energy's wind turbines in Fujian have achieved utilization hours of 2,744 hours for onshore wind and 3,905 hours for offshore wind in 2023, far exceeding the national average [25] Valuation and Risks - Despite its strong profitability, Zhongmin Energy's valuation remains low, with a P/E (TTM) of 14 20x as of October 22, 2024, compared to the sector average of 21 53x [26] - The report attributes the low valuation to concerns over the impact of low electricity prices from offshore wind bidding in 2022 and 2023, which have affected the company's growth trajectory [27] - The report also notes that the company's growth prospects could be constrained if offshore wind electricity prices remain low or if asset injections are delayed [27]