Power industry's performance in the first half is good

The golden decade of the coal industry has opened the boom cycle for the power industry. The power industry, which has been suppressed by coal prices for a long time, may have a turnaround this year. The coal price that began to decline since the end of last year has not yet reached the end. The comprehensive average price of thermal coal for the 5,500-kilowatt calorific value of ports in the Bohai Rim region recently closed at 631 yuan/ton, which was a drop of 22% from the beginning of the year. Peng Quangang, an industry analyst at China Merchants Securities, pointed out that a 1 percentage point drop in coal prices would increase the profit of thermal power companies by 2.7 percentage points. According to this calculation, as of now, thermal power industry profits have increased by at least 50%.

Thermal power "turn over"

According to the latest data released on July 25 by the Marine Coal Network, the comprehensive average price of thermal coal for the 5,500-kilometre calorific market in ports in the Bohai Rim region was reported at 631 yuan/ton, a decrease of 10 yuan/ton from the previous reporting period. On December 28, 2011, the average price of thermal coal reached 808 yuan/ton, which means that coal prices have fallen by nearly 22% this year.

As the cost of coal accounts for about 70% of the cost of coal-fired power plants, coal prices have fallen sharply, which is undoubtedly a good news for the thermal power industry.

As of July 26, 13 thermal power companies of A shares issued interim results announcements, and three announced interim results bulletins. The data shows that the thermal power industry is doing a good job. Among them, Jiantou Energy (000600) and *ST Yanneng (000899) suffered losses in the first half of the year, and the main cause of losses was the increase in gross profit of the thermal power industry.

The interim results of Shanghai Electric Power (600021), Chenneng Electric Power (000543) and Shengneng Power (000601) were pre-increase. Among them, Shanghai Electric expects the lowest increase in performance, but it also reached 50%. Yanneng Power expects the largest increase in performance. It is expected that net profit will increase by 121.86% to 168.08% in the first half of the year. Chenneng Power said that the improvement was mainly attributable to the increase in on-grid tariff over the same period of last year, and the increase in power generation over the same period of the previous year. The company’s main business income increased by approximately 58.85% over the previous year. The company’s main business power products realized a turnaround. Ying.

Due to the long-term inversion of coal-fired power prices, most thermal power companies still suffered losses. Among the 16 companies that announced interim announcements or express reports, seven had “continued losses.” But fortunately, the vast majority of companies have significantly reduced their losses. Changyuan Power (000,966) stated that the main reason for the narrowing of losses was that, starting from the second quarter of 2012, the price of fuel has declined due to the impact of international and domestic economic conditions.

Peng Quangang pointed out that the power industry has obvious counter-cyclical characteristics, the economic slowdown, coal prices fell, but the power industry electricity price viscosity is strong, the price of electricity will not be reduced in the short term. As a result, the profitability of the power industry is bound to improve.

"If hydropower is not used, the profits of the thermal power industry will improve even more if it is not because of large hydropower." A related person in charge of the thermal power plant disclosed to the reporter of the China Securities News that the company had stopped a generator unit.

Due to the better water supply situation, thermal power generated some of the market for hydropower in the first half of the year. Statistics show that in the first half of the year, the national average precipitation was 267.6 millimeters, an average of 3.1% over the average year-on-year, 28.6% more than in the same period of 2011; the cumulative hydropower generation increased by 9.9% year-on-year. The accumulated utilization hours of hydropower was 1,455 hours, which was a year-on-year increase of 3%.

In the first half of the year, the total amount of electricity generated in the country was 2.29 trillion kWh, an increase of 3.7% over the same period of last year. In other words, the increase in hydropower generation will inevitably squeeze the space for thermal power. In order to fully absorb hydropower, the relevant provinces generally arrange grid operation according to the minimum thermal power-on mode.

As the first company in the power industry to issue a mid-year report, the performance of Three Gorges Water Resources (600116) can represent the performance of the hydropower industry in the first half of the year.

In the first half of the year, the Three Gorges Water Resources realized a net profit of 34,474,300 yuan, a year-on-year increase of 713.40%. According to the company, during the reporting period, due to the successful commissioning of two units of the Yangdonghe Hydropower Station, and the fact that the company’s hydropower stations had a large amount of precipitation and water in the river basin, the company’s spontaneous water power increased substantially year-on-year, and the cost of outsourcing power decreased, bringing the company’s operating profit up A substantial increase.

As of July 26, of the 10 hydropower companies that announced interim results announcements, five companies had pre-incremented, with the minimum increase between 30% and 50%, with the largest increase reaching 100%. Although Xichang Electric (600505) and Wuyuan Power (002039) suffered losses in the first half of the year, Wuyuan Power announced that the first quarter of the Southwest caused less rainfall and the second quarter saw an increase in rainfall. The company’s single-quarter profit was about 0.6 billion yuan.

The rainfall situation in the second half of the year is still unable to accurately estimate, but in July the country entered the critical period of flood prevention, and heavy rainfall occurred in parts of north China, northeast and south. This means that the hydropower cycle lasts at least until July.