SWS Co. Ltd 99 East Nanjing Road, Shanghai +86 21 2329 7818 www.swsresearch.com Bringing China to the World New Energy Company 30 Aug 2018 中性 杠杆之殇 下调 GCL New Energy (451HK) Market Data: Aug 29, 2018 Financial summary and valuation Closing Price (HK$) 0.30 Price Target (HK$) 0.30 HSCEI HSCCI 52-week High/Low (HK$) 11,075 4,363 0.78/0.27 Market Cap (US$m) 729 Market Cap (HK$m) 5,722 Shares Outstanding (m) Exchange Rate (Rmb-HK$) 19,074 1.15 Price Performance Chart: Revenue (Rmbm) YoY (%) Net income (Rmbm) YoY (%) EPS (Rmb) Diluted EPS (Rmb) ROE (%) Debt/asset (%) Dividend Yield (%) PE (x) PB (x) EV/Ebitda (x) 2016 2017 2018E 2019E 2020E 2,246 226.51 130.4 0.01 0.01 3.2 41.6 36.2 0.9 13.6 3,942 75.49 848.4 550.7 14.3 57.3 5.7 0.8 11.5 4,703 19.29 805.1 (5.1) 11.2 63.8 6.0 0.7 10.4 5,196 10.49 833.3 3.5 10.4 67.7 5.8 0.6 10.5 5,518 6.20 898.4 7.8 0.05 0.05 10.1 70.3 5.4 0.6 10.6 Note: Diluted EPS is calculated as if all outstanding convertible securities, such as convertible preferred shares, convertible debentures, stock options and warrants, were exercised. 协鑫新能源 18 年上半年录得收入 27 亿元 同比增长 49.2% 和归母净利润 3.5 亿元(同比下降 28.9%) 我们下调 EPS 预测如下 18 年从 0.05 元下调至 元 同比持平 19 年从 0.05 元 Source: Bloomberg 下调至 元 同比持平 及 20 年维持 0.05 元 同比增长 25% 我们将目标价从 0.59 港币 下调至 0.30 港币 现行价距目标价上行空间为 0% 下调评级为中性 Analyst Vincent Yu, CFA A0230513070005 BAM599 yuwj@swsresearch.com (+86) 21 2329 7301 融资成本增长 收入增长主要是由于光伏电力销量增长 59% 由于 17 年 6 月 30 日后并网项目电 价下调及参与竞争性竞标电价 毛利率从 17 年中期的 70.8%降至 18 年上半年的 68.7% 与去年 同期的 0.80 元/千瓦时相比 上半年平均电价 除税后 约为 0.76 元/千瓦时 18 年上半年融资 成本增长 75%至 11 亿元主要是由于平均借款结余增加 同时平均借款利率从 17 年的 6.8%降至 18 年的 6.5% Related Reports " GCL New Energy (451HK) Expanding capacity " 16 Mar 2018 负债高企 与 17 年底的 354 亿元相比 18 年 6 月公司借款总额达 374 亿元 净负债率则从去年 年底的 330%增至 18 年上半年的 364% 借款增加主要用于增加 18 年上半年的光伏装机量 截 至 18 年 6 月底 政府补助应收款达 61 亿元 2017 年为 42 亿元 包括等待申请登记第八批或 之后批次的非流动应收款项 30 亿元 关于非流动应收款项部分 考虑到 6 月前补贴缺口已超 1200 万 我们对是否发布第八批补助目录持保留意见 The company does not hold any equities or derivatives of the listed company mentioned in this report ( target ), but then we shall provide financial advisory services subject to the relevant laws and regulations. Any affiliates of the company may hold equities of the target, which may exceed 1 percent of issued shares subject to the relevant laws and regulations. The company may also provide investment banking services to the target. The Company fulfills its duty of disclosure within its sphere of knowledge. The clients may contact compliance@swsresearch.com for relevant disclosure materials or log into www.swsresearch.com under disclosure column for further information. The clients shall have a comprehensive understanding of the disclosure and disclaimer upon the last page. 装机量扩张 18 年上半年公司国内新增装机容量约 1.2GW 同时总装机容量同比增长 41%至 7.1GW 其中已并网容量为 6.1GW 国内光伏电站的总装机容量超过 89%位处二 三类资源区 受限电问题影响较小 上半年国内新增装机容量取得调整前电价 几乎不受 531 新政影响 同 时 公司 18 年上半年的典型光伏电价平均单瓦造价降至 5.9 元 比去年同期的 6.3 元下降约 6% 预计电站造价下半年仍有下降空间 下调评级为中性 我们下调 EPS 预测如下 18 年从 0.05 元下调至 元 持平 19 年从 0.05 元下调至 元 持平 及 20 年维持 0.05 元 同比增长 25% 我们将目标价从 0.59 港 币下调至 0.30 港币 相当于 6 倍 18 年 PE 和 0.7 倍 18 年 PB 现行价距目标价上行空间为 0% 下调评级为中性
SWS Co. Ltd 99 East Nanjing Road, Shanghai +86 21 2329 7818 www.swsresearch.com New Energy Company Bringing China to the World GCL New Energy reported 1H18 revenue of Rmb2.7bn (+49.2% YoY) and net profit of Rmb345m (- 28.9% YoY). We revise down our EPS forecast from Rmb0.05 to Rmb in 18E (flat YoY), from Rmb0.05 to Rmb in 19E (flat YoY) and maintain our forecast at Rmb0.05 in 20E (+25% YoY). We revise down our target price from HK$0.59 to HK$0.30. With 0% upside, we downgrade to Hold. Finance cost rally. The strong increase in revenue was mainly due to a 59% YoY increase in sales of solar power. Gross margin declined from 70.8% in 1H17 to 68.7% for 1H18, mainly attributable to tariff cuts for projects connected to the grid after 30 June 2017. The average tariff (tax exclusive) was c.rmb0.76/kwh, compared with Rmb0.80/kWh last year. Finance cost rallied 75% YoY to Rmb1.1bn for 1H18, mainly due to a significant increase in borrowings, even as the average cost of borrowing declined from 6.8% in 2017 to 6.5% in 2018. High gearing concern. The company s total borrowings amounted to Rmb37.4bn by June 2018, comparing with Rmb35.4bn by end-2017. Net debt to total equity ratio reached 364% for 1H18 vs 330% at end-2017. The increasing in borrowings are mainly used in solar power capacity expansion over 1H18. By end-june 2018, receivables from government subsidies owed amounted to Rmb6.1bn (Rmb4.2bn for 2017), of which Rmb3bn are non-current receivables to be registered for from later rounds of subsidy awards. We expect for 2H18, payments of subsidies may accelerate and alleviate the firm s current portion of its receivables. However, for the non-current portion, we hold conservative view as to whether the government will release a new catalogue of eligible projects for subsidies, given that the gap between subsidies due and funds available has enlarged to more than Rmb120bn by June. Capacity expansion. In 1H18, the company s newly installed capacity was 1.2GW, bringing total installed capacity by end-june to 7.1GW (+41% YoY), of which, grid-connected capacity amounted to 6.1GW. More than 89% of domestic solar capacity is located in regions where curtailment issues are limited. In addition, nationwide newly installed capacity in 1H18 was eligible for tariffs before adjustments and was nearly free from the impact of the 531 policy. We see the average construction cost per watt for solar power plants decreased to Rmb5.9 in 1H18 from Rmb6.3 in 1H17 (-6% YoY). We expect average construction cost will drop further in 2H18 to below Rmb5.9/W. Downgrade to Hold. We revise down our EPS forecasts from Rmb0.05 to Rmb in 18E (flat increase), from Rmb0.05 to Rmb in 19E (flat increase) and maintain at Rmb0.05 in 20E (+25% YoY). We revise down our target price from HK$0.59 to HK$0.30, representing 6x 18E PE and 0.7x 18E PB. With 0% upside, we downgrade to Hold.
Building Food, Materials Beverage Utilities & Company Tobacco Company Company Consolidated Income Statement Rmbm 2016 2017 2018E 2019E 2020E Revenue 2,246 3,942 4,703 5,196 5,518 Cost of Sales -676-1,289-1,666-1,855-2,038 Gross Profit 1,571 2,653 3,037 3,341 3,480 Other Income 167 221 400 325 250 Distribution expenses 0 0 0 0 0 Administrative expenses -371-460 -460-460 -460 EBITDA 1,956 3,340 4,450 4,942 5,242 EBIT 1,233 2,296 2,975 3,299 3,429 Finance Costs -966-1,432-2,036-2,316-2,289 Profit Before Tax 267 864 940 983 1,140 Income Tax Expense 42 40-71 -84-170 Minority Interests 6 72 64 66 71 Profit for the Year 141 981 869 900 970 Source: Company data, SWS Consolidated Cash Flow Statement Rmbm 2016 2017 2018E 2019E 2020E Profit before taxation 267 864 940 983 1,140 Plus:Depr. and amortisation 722 1,044 1,475 1,643 1,812 Finance cost 978 1,432 2,036 2,316 2,289 Losses from investments 0 0 0 0 0 Change in working capital (1,629) (2,972) (3,867) (3,065) (2,509) Others 111 (605) (71) (84) (170) CF from operating activities 450 (236) 512 1,793 2,563 Capex 11,295 15,838 9,576 7,391 5,401 Other CF from investing activities (1,130) (3,682) (3,276) (903) 862 CF from investing activities (9,714) (12,393) (5,788) (4,696) (3,701) Equity financing 0 0 0 0 0 Net change in liabilities 8,780 0 (7,068) (8,957) (9,726) Dividend and interest paid (1,269) (1,432) (2,036) (2,316) (2,289) Other CF from financing activities 3,643 11,845 15,230 14,557 13,182 CF from financing activities 11,155 10,412 6,127 3,284 1,167 Net cash flow 1,890 (2,217) 851 382 29 Source: Company data, SWS Consolidated Balance Sheet Rmbm 2016 2017 2018E 2019E 2020E Current Assets 9,608 8,134 8,704 9,276 9,373 Bank balances and cash 3,826 1,610 2,461 2,843 2,871 Trade and other receivables 3,386 4,228 3,946 4,137 4,205 Inventories 0 0 0 0 0 Other current assets 2,395 2,297 2,297 2,297 2,297 Long-term investment 42 63 63 63 63 Please refer to the last page for important disclosures Page 1
Building Food, Materials Beverage Utilities & Company Tobacco Company Company PP&E 26,755 38,104 42,417 45,470 47,358 Intangible and other assets 5,073 7,677 8,742 9,432 9,883 Total Assets 41,478 53,979 59,927 64,242 66,678 Current Liabilities 18,017 20,026 19,714 18,299 17,035 Borrowings 4,948 7,068 8,957 9,726 10,451 Trade and other payables 11,394 10,851 9,576 7,391 5,401 Other current liabilities 1,676 2,107 1,182 1,182 1,182 Long-term liabilities 17,041 26,612 32,003 36,834 39,565 Total Liabilities 35,059 46,638 51,717 55,133 56,599 Minority Interests 1,847 1,919 1,983 2,049 2,120 Shareholder Equity 6,420 7,340 8,209 9,109 10,079 Share Capital 67 67 67 67 67 Reserves 4,425 5,554 6,359 7,193 8,091 Total Equity 4,573 5,421 6,226 7,060 7,958 Total Liabilities and equity 41,478 53,979 59,927 64,242 66,678 Source: Company data, SWS Key Financial Ratios 2016 2017 2018E 2019E 2020E Ratios per share (Rmb) Earnings per share 0.01 0.05 Diluted EPS 0.01 0.05 Operating CF per share 0.02-0.01 0.03 0.09 0.13 Dividend per share 0.00 0.00 0.00 0.00 0.00 Net assets per share 0.34 0.38 0.43 0.48 0.53 Key Operating Ratios (%) ROIC 0.1 0.1 0.1 0.1 0.1 ROE 0.0 0.1 0.1 0.1 0.1 Gross profit margin 0.7 0.7 0.6 0.6 0.6 Ebitda Margin 0.9 0.8 0.9 1.0 0.9 Ebit Margin 0.5 0.6 0.6 0.6 0.6 Growth rate of Revenue(YoY) 2.3 0.8 0.2 0.1 0.1 Growth rate of Profit(YoY) 5.5 (0.1) 0.0 0.1 Debt-to-asset ratio 0.4 0.6 0.6 0.7 0.7 Turnover rate of net assets 0.51 0.57 0.60 0.60 0.58 Turnover rate of total assets 0.07 0.08 0.08 0.08 0.08 Effective tax rate (%) 3.9 7.3 7.5 8.5 14.9 Dividend yield (%) Valuation Ratios (x) PE 36.2 5.7 6.0 5.8 5.4 PB 0.9 0.8 0.7 0.6 0.6 EV/Sale 11.9 9.7 9.9 10.0 10.1 Source: Company data, SWS Please refer to the last page for important disclosures Page 2
Building Food, Materials Beverage Utilities & Company Tobacco Company Company Information Disclosure: The views expressed in this report accurately reflect the personal views of the analyst. The analyst declares that neither he/she nor his/her associate serves as an officer of nor has any financial interests in relation to the listed corporation reviewed by the analyst. None of the listed corporations reviewed or any third party has provided or agreed to provide any compensation or other benefits in connection with this report to any of the analyst, the Company or the group company(ies). 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I am also responsible for the content and opinions of this report. I have never been, am not, and will not be compensated directly or indirectly in any form for the specific recommendations or opinions herein. Disclosure with respect to the Company The company is a subsidiary of Shenwan Hongyuan Securities. The company is a qualified securities investment consulting institute approved by China Securities Regulatory Commission with the code number ZX0065. Releasing securities research reports is the basic form of the securities investment consulting services. The company may analyze the values or market trends of securities and related products or other relevant affecting factors, provide investment analysis advice on securities valuation/ investment rating, etc. by issuing securities research reports solely to its clients. The Company fulfills its duty of disclosure within its sphere of knowledge. The clients may contact compliance@swsresearch.com for the relevant disclosure materials or log into www.swsresearch.com for the analysts' qualifications,the arrangement of the quiet period and the affiliates shareholdings. Introduction of Share Investment Rating Security Investment Rating: When measuring the difference between the markup of the security and that of the market s benchmark within six months after the release of this report, we define the terms as follows: Trading BUY: Share price performance is expected to generate more than 20% upside over a 6-month period. BUY: Share price performance is expected to generate more than 20% upside over a 12-month period. Outperform: Share price performance is expected to generate between 10-20% upside over a 12-month period. Hold: Share price performance is expected to generate between 10% downside to 10% upside over a 12-month period. Underperform: Share price performance is expected to generate between 10-20% downside over a 12-month period. SELL: Share price performance is expected to generate more than 20% downside over a 12-month period. Industry Investment Rating: When measuring the difference between the markup of the industry index and that of the market s benchmark within six months after the release of the report, we define the terms as follows: Overweight:Industry performs better than that of the whole market; Equal weight: Industry performs about the same as that of the whole market; Underweight:Industry performs worse than that of the whole market. We would like to remind you that different security research institutions adopt different rating terminologies and rating standards. We adopt the relative rating method to recommend the relative weightings of investment. The clients decisions to buy or sell securities shall be based on their actual situation, such as their portfolio structures and other necessary factors. The clients shall read through the whole report so as to obtain the complete opinions and information and shall not rely solely on the investment ratings to reach a conclusion. The Company employs its own industry classification system. The industry classification is available at our sales personnel if you are interested. HSCEI is the benchmark employed in this report. Disclaimer: This report is to be used solely by the clients of SWS Co., Ltd. (subsidiary of Shenwan Hongyuan Securities, hereinafter referred to as the Company ). The Company will not deem any other person as its client notwithstanding his receipt of this report. This report is based on public information, however, the authenticity, accuracy or completeness of such information is not warranted by the Company. 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Please refer to the last page for important disclosures Page 3
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