The policy has forced the PV industry chain to accelerate, and replacing thermal power is not a dream.
531 Under the influence of the policy, the price of the manufacturing end was rapidly measured, which forced the whole industry chain to accelerate the parity. At present, the electricity price of thermal power grids in all provinces and regions across the country is 0.25~0.45 yuan/KWh. Under the assumption that the subsidies are all withdrawn in 2020 and the price of thermal power is unchanged, in 2020, there will be 27 areas in the 32 power districts in China with 6. PV parity. It accounts for 84% of the total power area.
The quota system superimposed on power cuts and improved the company's profit elasticity
Under the quota system, the province's non-water power generation quotas are estimated. It is estimated that the total non-water quota power generation in the country will be 5472.9, 6470.3, and 755.37 billion kWh in 18-20 years, and the CAGR will reach 17%, which will become the minimum development for the next two years. With the gradual landing of the “Clean Energy Absorption Action Plan (2018-2020) Exposure Draft” issued by the Energy Bureau in May, the follow-up rate in the Northwest and Xinjiang regions will be greatly reduced, with conservative improvement and neutral improvement. Under the optimistic improvement situation, only the power-saving improvement of the installed capacity in the northwest region will bring about 21.7%, 53.8%, and 64.5% of the company's flexible growth.
The valuation of the sector is at a historically low level, and the scarcity attribute allows the company to enjoy a higher premium.
Among the current A-share operators, only solar energy is in a state of ruin. Among the eleven operating operators in the statistics, there are 9 net-breaking targets, and only A-shares contain solar energy. Considering that the operator's performance with the increase in installed capacity is relatively stable, and the power cuts are improved and the cost is reduced, the new installed capacity will further release the performance. We believe that the current safety margin of the sector is relatively high and should be given higher valuation expectations.
risk warning
Domestic PV policy is bearish, support for distributed, front-runners, and PV poverty alleviation has generally declined; domestic PV subsidies have fallen more than expected, and the rate of abandoned light is high; the decline in national economic growth has driven the downturn in the downstream industry; New installed capacity and power generation hours were less than expected.
The company's reasonable valuation is around 6.91 yuan
Considering that solar energy is a dominant company for PV operators, you should enjoy a leading premium. And the industry is in the midst of quota emission, power cut improvement, and cost reduction. We believe that the company can enjoy a higher than the valuation premium of the same industry chain. As PV operators are scarce in A-shares, if the cross-market relative valuation will lead to biased results and comprehensive absolute valuation, we believe the company's reasonable stock price is 6.91 yuan / share, compared with the previous closing price of 3.68 yuan (2018 8 The closing price on the 7th of July) has a valuation space of 87.78%, giving a “Buy” rating.