China Resources Power business grew steadily increased cost control
Click to see more exciting information2009 China Resources Power of 41 operating power plants in total electricity sales of 114 million MWh, compared to 97 million megawatts in 2008 when the increase of 17.1%. Interests of the company's operating installed capacity of 12,981 MW by the end of 2008 increased to 17,753 MW by the end of 2009, an increase of 4,772 MW. In the context of macro-economic recovery, the company's power business grew steadily, while the company continues to actively extend to the upper reaches of the coal industry, we believe the company's vertical integration strategy will ensure that the power business, better control of coal supply and operating costs, maintain stock rating.
Steady growth the company electricity. In 2009, China Resources Power, a subsidiary of power plant operators throughout the year grew 16.2% in electricity sales, the growth rate above the national average, and in 2008 and in 2009 the 22 year operational coal-fired power plants than the average utilization hours of the 5560 hours the previous year up to 5750 hours, the increase was 3.4%, and coal-fired power plants than the national average utilization hours of 4839 substantially higher than the 911 hours. At present, demand for electricity is rapidly rise, China Resources Power 2010, two months of net generating capacity grew 49% to 14.4 billion kwh, 10 years, we expect the company's sales of electricity will remain over 25% growth.
Integrated upstream and downstream business strategy will enable the company to gradually increase the cost of control. Units of electricity sold the company in 2009 to 208.1 yuan fuel costs, down 12.9%, the average standard coal power plant subsidiary operating costs fell 12.3%. Company's current coal reserves at about 600 million tons, the future regional integration in Luliang and Taiyuan Other Nearly 2 billion tons of coal resources and total reserves. We expect the company 10 years, producing approximately 16 million tons of coal, of which 9 million tons capacity in Luliang District, Taiyuan 300 million tons, about 400 million tons in other regions, we expect the company's coal self-sufficiency rate would gradually increase in 2012 coal self-sufficiency rate is expected to reach 40%.
Price increases remains uncertain. Coal price linkage mechanism according to the current thermal coal prices, electricity prices should be up 50 yuan / MW or 13%, but management said the Government did not approve the price increase request, we expect price increases will likely in the third quarter. Taking into account price fluctuations in China Resources Power of the sensitivity of small, small price increases if the 10-year, we expect earnings per share on the company's impact was relatively small.
To Buy rating, target price of 20.50 Hong Kong dollars. The first two months of 2010, the company with plant growth with diameter up to 18.5% capacity, the company's use of 2010 hours than in 2009 may increase 8%, we expect the 2010-2011 Basic earnings per share up 1.28,1.48 Hong Kong dollars, corresponding to the expected price-earnings ratio of 12.1 times and 10.4 times, maintain Buy rating, 12-month target price of 20.5 Hong Kong dollars
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