1、Asia China Energy Alternative Energy 6 July 2010 Utility/Alternative Energy Qinhuangdao coal price stays flat WoW Michael Tong, CFA Research Analyst (+852) 2203 6167 Eric Cheng, CFA Research Analyst (+852) 2203 6202 eric- Kai-Ting Wong Research Assistant (+852) 2203 6235 kai- Deutsche Bank AG/Hong
2、Kong All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. Deutsche Bank does and seeks to do business with compan
3、ies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIO
4、NS ARE LOCATED IN APPENDIX 1. MICA(P) 007/05/2010 Periodical Companies featured China High Speed Trans (0658.HK),HKD15.72 Buy2008A 2009E 2010EP/E (x) 21.6 19.3 13.5EV/EBITDA (x) 18.3 13.9 10.2Price/book (x) 2.9 3.8 3.0China Resources Power (0836.HK),HKD17.24 Buy2009A 2010E 2011EP/E (x) 14.2 13.8 13.
5、0EV/EBITDA (x) 11.7 9.6 8.1Price/book (x) 1.9 1.9 1.7Shanghai Electric (2727.HK),HKD3.45 Buy2009A 2010E 2011EP/E (x) 14.6 13.0 11.5EV/EBITDA (x) 4.9 5.4 4.9Price/book (x) 1.8 1.4 1.3Yingli Green Energy (YGE.N),USD11.12 Buy2009A 2010E 2011EP/E (x) 27.1 9.8 11.0EV/EBITDA (x) 15.9 5.8 5.8Price/book (x)
6、 2.2 1.4 1.3Trina Solar (TSL.N),USD19.28 Buy2009A 2010E 2011EP/E (x) 6.9 8.6 8.6EV/EBITDA (x) 4.6 4.4 3.9Price/book (x) 2.4 1.3 1.1Company Global Markets Research Recent published reports CLP Holdings Alert: Participation in Yangjiang nuclear project finalized CLP announced that it has finalized the
7、 agreement to take a 17% stake in the Yangjiang nuclear project (6,000MW) in Guangdong, China. Although this has been well flagged over the past two years as a potential investment, we still reckon it as positive to the company due to its sheer size and the favourable project return outlook. On an a
8、ttributable basis, the investment should add 8% upside to CLPs current generation capacity and roughly 56% earnings upside on Deutsche Banks FY11E once it is fully commissioned in 2017 (first unit to start in 2013). Company news China Everbright increases investment in Suqian City (Company press rel
9、ease) China Everbright has announced the signing of a strategic and cooperative framework agreement with the Municipal Government of Suqian City, Jiangsu province. The agreement stipulates that Everbright plans to gradually increase its investment in the construction of energy saving, environmental
10、protection, alternative energy and industrial park projects reaching a total value of RMB2-3bn the next three to five years. The Suqian Waste-to-Energy Project, which Everbright International tendered in November 2009, commenced construction on 30 June 2010. Huaneng Power completes RMB5bn debentures
11、 issue (Company announcement) Huaneng Power said it completed a second-tranche issue of RMB5bn one-year debentures on 2 July. The utility plans to use the proceeds to pay back bank debt, strengthen its financial structure, and provide short-term working capital. The placement followed the companys d
12、ecision to issue CNY10bn short-term debentures in one or multiple tranches in China within 12 months from the date of shareholders approval, which was given on 22 June, it said. The debentures have a face value of CNY100 apiece and interest of 3.20%. CNPC eyes 500 mcm shale gas output by 2015 (Reute
13、rs) China National Petroleum Corporation (CNPC) aims to produce 500 million cubic metres (mcm) of shale gas by 2015, according to a company executive. China does not have any shale gas production, and evaluation of the potential resources is only in the preliminary stages, Deputy General Manager Lia
14、o Yongyuan said. Yangtze Power 1H10 power output up 113% yoy (Bloomberg Finance LP) China Yangtze Power Co. said its first-half electricity output gained 113% from a year earlier to 36.7bn kilowatt hours, according to a statement on the website of Shanghais stock exchange. The company also said it s
15、igned a contract to sell 15.1bn kilowatt hours of electricity to Central China Grid Co., a unit of State Grid Corp. of China, this year, according to a separate statement. Sector news Shandong province sets solar tariff at RMB1.7/kWh (incl. VAT) (Bloomberg Finance LP) Chinas Shandong province has se
16、t an electricity purchase price of RMB1.7/kWh for photovoltaic power plants for 2010. The expense of providing the preferential tariff will be shared between the central, provincial and municipal governments, the Shandong government said in a statement posted on its website. In addition to a nationa
17、l renewable energy subsidy, the costs will be 55% covered by the province, and 45% by the plants local government. Next year and 2012, Shandong plans to lower the tariffs for ground-mounted photovoltaic plants to RMB1.4/kWh and RMB1.2/kWh, respectively. The eastern Chinese province will pay a subsid
18、y of RMB10/W for selected solar rooftop and building-integrated photovoltaic plants. The provincial government said its policy will be in line with a national strategy to push private investment in solar power businesses. Chinas natural gas consumption to reach 300 bcm per year in 2020 (Xinhua) Acco
19、rding to Deng Yusong, State Council Development Research Center of Integrated Research Institute of Market Economy Director, Chinas natural gas consumption should increase to 150bcm/yr in 2015, and 300bcm/yr in 2020. Furthermore, Deng said natural gas share in the total energy mix will rise to 8-10%
20、 by 2020. Solar energy to achieve grid parity by 2013 (Pike Research) According to a report by Pike Research, by 2013, in many markets, solar costs will reach the long-elusive goal of grid parity, the cost of electricity from traditional power sources. The factors involved include the declining pric
21、e of solar cells, growing solar energy demand, the global financial crisis, and the recent increase in polysilicon production. Several areas in China may experience tight coal supply in July (Hexun) With temperatures rising and a surge in demand this summer, many provinces and cities nationwide are
22、facing a tight coal supply situation. According to Shandong Electric Power, a subsidiary of State Grid, Chinas peak demand is likely to occur between the middle of July and August this year, and it is likely to be 12.6% higher than 2009. However, several power plants in Huangdao, Qingdao, Anhui, Jia
23、ngsu and Hebei have very lower coal inventory and are experiencing tight coal supply. China June power demand growth to slow sharply to 15% yoy (Shanghai Securities News, China Securities Journal) Chinas power consumption growth in June slowed down sharply, as power use in the countrys heavy industr
24、y trended lower, the Shanghai Securities News said. According to China Securities Journal, the latest numbers from State Grid show that power demand in June was up 15% yoy. A person from the China Electricity council estimates that the growth in China power demand should approximately be around 15%
25、vs. 20% yoy growth in May, as power demand growth turned positive in June last year, resulting in a higher base. Chinas coal prices unchanged on inflation (Bloomberg Finance LP) Weekly coal prices at Qinhuangdao port, a benchmark in China, were unchanged after the government told producers to keep p
26、rices stable to curb inflation. The price of coal with an energy value of 5,500kCal stood at RMB750-760/t as of today, unchanged from a week earlier, data from the China Coal Transport and Distribution Association show. The NDRC, Chinas top economic planner, also said that prices in annual supply co
27、ntracts should not be amended. Coal price update RMB/t 28-Jun-10 5-Jul-10 WoW Datong 5,800kCal 785 785 0 Shanxi 5,500kCal 755 755 0 Shanxi 5,000kCal 655 655 0 Comps and share price analysis table (see Figures 1 and 2) 6 July 2010 Alternative Energy Utility/Alternative Energy Deutsche Bank AG/Hong Ko
28、ng Page 3 Recent research reports CLP Holdings Alert: Participation in Yangjiang nuclear project finalized CLP announced that it has finalized the agreement to take a 17% stake in the Yangjiang nuclear project (6,000MW) in Guangdong, China. Although this has been well flagged over the past two years
29、 as a potential investment, we still reckon it as positive to the company due to its sheer size and the favourable project return outlook. On the attributable basis, the investment will add 8% upside to CLPs current generation capacity and roughly 56% earnings upside on Deutsche Banks FY11E once it
30、is fully commissioned in 2017 (first unit to start in 2013). Located in Guangdong, the project has six 1,000MW PWR units with CPR1000 type of reactors. The majority shareholder is China Guangdong Nuclear Power Company, or CGNPC CLPs partner in the existing Daya Bay nuclear project (25% stake owned b
31、y CLP). Project capex is estimated to be RMB7080bn with construction work kicking off in late 2008. CLP does not disclose the consideration of the investment. Given the project is already under construction with lengthy preparatory works done solely by CGNPC, we believe the transfer of 17% stake wil
32、l be priced at some premium to CGNPCs original cost (estimated at c.RMB3bn for the 17% equity portion). Unlike Daya Bay project, Yangjiang will mainly supply local demand instead of Hong Kong. Thus, we expect the project will be less profitable than the lucrative Daya Bay project which generates abo
33、ut HK$600m profit to CLP p.a. for an 492MW equity capacity. However, drawing from other nuclear projects in China, we believe the project is likely to offer a 15% equity IRR. Based on some back-of-envelop calculation, there could be HK$500600m dividend contribution p.a. once fully operational, or 56
34、% upside based on our FY11E earnings. Nevertheless, this is a medium to long-term investment with no immediate earnings upside by 2013 at the earliest. Maintain Hold. The following link will be available for 90 days. For more information, please click on the link for the full PDF. If you have any tr
35、ouble viewing the link, copy and paste the link in a browser. http:/pull.db- Utilities Alert: China IPPs: positive signs of tariff hikes Today we notice three pieces of news flow that indicate the rising chance of a tariff hike. First, a member of NDRC admitted to the public for the first time this
36、year that a tariff hike is under consideration. Second, another NDRC official warned that power supply will be tight in some regions in the coming summer. Third, the CPI released in May points to some easing inflation pressure in our economist Jun Mas view, and Jun Ma believes the CPI peak may be so
37、mewhat lower than previous expectation. Currently, China IPPs trade at an almost 10-year low (since 2001) on P/B. Thus, we expect a short-term trading opportunity to emerge in coming months. However, we maintain our rating given the lack of clarity on magnitude and scope, as we believe we are unlike
38、ly to see a universal tariff increase across the country. The following link will be available for 90 days. For more information, please click on the link for the full PDF. If you have any trouble viewing the link, copy and paste the link in a browser. http:/pull.db- Shanghai Electric: Fifty questio
39、ns answered on the road; Buy Ticker: 2727.HK, Closing Price: 3.43 HKD, Target Price: 4.10 HKD, Recommendation: Buy Reiterate Buy after returning from non-deal road show We travelled with the management team for a week for a non-deal road show in Europe. We summarize the key investor Q (2) excess pro
40、fits from CNG refueling stations would need to be surrendered to local governments; and (3) a public hearing is still required for residential gas tariff adjustments, which would result in a short-term margin squeeze. For more information, please click on the link for the full PDF. If you have any t
41、rouble viewing the link, copy and paste the link in a browser. http:/pull.db- Published by Eric Cheng on 4 June 2010 6 July 2010 Alternative Energy Utility/Alternative Energy Deutsche Bank AG/Hong Kong Page 5 Comps and share price analysis tables Figure 1: Comparable companies analysis Last Updated:
42、 05 Jul 2010 07:28Mkt. Cap. Absolute RelativeCompany Ticker Price Rating Price target % to target US$m 3m 3m 10F 11F 10F 11F 10F 11F 10F 11F 10F 11F 10F 10FChina IPPsDatang 991.HK HK$3.17 Hold HK$3.60 14% 4,688 -11% 0% 20.0 13.4 9.2 7.0 1.2 1.1 6.1 8.6 4.5 5.9 315.9 2.9 CR Power 836.HK HK$17.38 Buy
43、HK$23.10 33% 9,217 5% 18% 13.9 13.1 9.6 8.1 1.9 1.8 14.7 14.1 8.3 8.1 114.8 2.4 Huaneng 902.HK HK$4.53 Hold HK$4.90 8% 7,007 0% 13% 13.0 13.1 9.0 8.6 1.1 1.1 8.8 8.5 5.0 4.9 253.9 4.2 Huadian 1071.HK HK$1.86 Hold HK$2.10 13% 1,437 -6% 7% 22.4 13.3 8.9 7.0 0.7 0.7 3.0 5.0 4.4 5.4 312.5 2.3 CPI 2380.H
44、K HK$1.68 Hold HK$2.10 25% 676 -9% 3% 11.1 10.1 8.9 8.6 0.6 0.6 5.6 5.9 4.9 5.7 346.9 4.0 Yangtze 600900.CH RMB12.42 Buy RMB16.10 30% 17,264 -1% 31% 18.0 17.2 10.1 9.7 2.0 1.9 11.7 11.4 7.1 7.2 118.4 3.0 China GasTowngas China * 1083.HK HK$2.96 Hold NA NA 743 -23% -13% 18.7 15.6 10.3 8.0 0.9 0.8 5.1
45、 5.3 5.2 5.4 17.6 1.3 BJ Enterprises * 392.HK HK$51.50 Buy HK$62.00 20% 7,515 -8% 4% 21.8 18.8 10.9 9.0 1.8 1.6 9.0 9.8 7.3 7.8 8.4 1.7 XinAo Gas * 2688.HK HK$17.74 Hold HK$21.20 20% 2,390 -17% -6% 16.1 13.3 9.4 8.0 2.7 2.3 18.6 18.8 12.6 12.6 35.9 2.3 China Gas * 384.HK HK$4.21 Hold NA NA 1,802 -4%
46、 8% 24.9 21.4 12.3 10.6 3.4 2.9 15.2 15.5 7.3 7.9 114.1 0.7 China WaterGuangdong Inv. * 0270.HK HK$3.65 Buy HK$5.00 37% 2,910 -17% -7% 10.2 9.7 6.4 6.0 1.3 1.2 13.0 12.7 9.5 9.5 15.6 4.2 China EB Intl * 0257.HK HK$3.30 Hold NA NA 1,334 -20% -10% 24.7 22.4 14.3 13.5 2.4 2.2 10.1 10.3 10.1 9.3 28.6 0.
47、9 China Power EquipmentDongfang Elect. 1072.HK HK$23.35 Hold HK$23.10 -1% 6,004 7% 21% 18.7 15.2 7.2 5.4 3.8 3.1 22.5 22.4 NM NM (122.5) 0.6 Harbin Pwr 1133.HK HK$5.50 Hold HK$6.50 18% 972 -15% -4% 8.7 10.1 3.6 4.5 0.7 0.7 8.4 6.8 10.9 7.3 (1.8) 1.5 Shanghai Elect. 2727.HK HK$3.41 Buy HK$4.10 20% 5,
48、611 -13% -2% 12.9 11.3 5.3 4.8 1.4 1.3 12.0 12.0 19.6 13.8 (25.5) 2.0 CHSTE 0658.HK HK$16.02 Buy HK$21.50 34% 2,559 -7% 5% 13.8 11.7 10.3 8.3 3.1 2.4 26.3 23.5 17.1 17.3 32.9 2.6 China SolarYingli Green Energy YGE.N US$11.12 Buy US$16.10 45% 1,696 -13% 0% 9.8 11.0 5.8 5.8 1.4 1.3 16.3 12.4 12.6 10.5 33.5 - TrinaSolar TSL.N US$19.28 Buy US$31.30 62% 1,252 -21% -9% 8.6 8.6 4.4 3.9 1.3 1.1 20.1 15.9 22.1 19.2 (8.4) - Renesola SOL.N US$6.84 Buy US$9.50 39% 586 12% 29% 8.6 8.1 6.8 6.5 1.3 1.1 15.8 14.4 9.5
