With the voice of reducing carbon emissions and “carbon neutralization” rising, clean energy such as hydrogen energy and nuclear energy are taking advantage of the wind. It can be seen from the financial reports of the first quarter of this year disclosed by the listed companies in the power industry that the performance of the power enterprises mainly engaged in clean energy and new energy such as nuclear power, hydropower, photovoltaic power generation and wind power is generally good in the first quarter; However, the performance of power enterprises that rely on traditional coal-fired thermal power business will suffer losses or decline. Industry insiders said that under the pressure of cost growth and stricter supervision, it is imperative for thermal power enterprises to transform into new energy and clean energy.
40% of enterprises’ net profit declines
As of April 29, 44 A-share listed companies in the power industry have disclosed their financial reports in the first quarter of this year.
Beijing Business Daily reporter found that there were 26 enterprises with year-on-year net profit growth, accounting for about 60%; There were 18 companies with net profit declining year on year, accounting for about 40%.
Among the 21 power enterprises which are mainly engaged in thermal power business, the net profit of 13 enterprises showed loss or decline in the first quarter, accounting for about 2 / 3.
As one of the power companies with the largest decline in performance in the first quarter, Jinkong power operates wind power and photovoltaic power generation business, but its pillar business is thermal power. According to the financial report, in 2020, the thermal power revenue of Jinkong electric power is 11.687 billion yuan, accounting for 68.93% of the total revenue. In the first quarter of 2021, the net profit attributable to the shareholders of the listed company was 3.9309 million yuan, a year-on-year decrease of about 95%.
Among other thermal power enterprises, the net loss attributable to shareholders of the listed company in the first quarter was 49.4034 million yuan, which turned from profit to loss on a year-on-year basis; In the first quarter, Dalian thermal power’s revenue was about 402 million yuan, a year-on-year decrease of 1.02%, and its net profit was about 43.5 million yuan, a year-on-year decrease of 17.6%; The net profit of Wanneng power in the first quarter was 110 million yuan, a year-on-year decrease of 16.44%; The first quarter net profit of Henan Energy Holding Co., Ltd. was about 27.81 million yuan, a year-on-year decrease of 17.14%.
For the reasons of net profit decline, many enterprises mentioned the factors of coal price rise. Guangdong Electric Power said in the announcement that the increase of market trading electricity and the sharp rise of electricity coal price this year have significantly increased the cost of power generation, and the company’s gross profit rate has decreased by 6.14% year on year, resulting in a loss in the company’s performance in the first quarter.
Data show that from January to February 2021, the average unit price of standard coal delivered to the plant of Huaneng, Datang, Huadian and SDIC reached 805 yuan / ton, up 136 yuan / ton year on year; From January to April, the average price of 5500 kcal in the annual medium and long-term contract of steam coal was 585 yuan / ton, up 41.5 yuan / ton year on year. The industry estimates that in the case of soaring electricity coal prices, the purchasing cost of electricity coal of national coal and electricity enterprises will increase by about 47 billion yuan in the first quarter.
Guo Yuxuan, a researcher at Beijing read Economic Research Institute, said that in order to achieve the goals of “carbon peak” and “carbon neutral”, China has closed some coal plants since last year, and more coal plants are being closed this year to better achieve the low-carbon goal. The expectation of production reduction has led to the rise of coal price in this round.
Clean energy drives performance
Different from the downturn of traditional energy enterprises, the first quarter performance of power enterprises mainly engaged in clean energy and new energy such as nuclear power, hydropower, photovoltaic power generation and wind power was generally good.
China Guanghe said in the announcement that the increase in net profit was mainly due to the increase in utilization hours of power generation in the first quarter. The total power generation of nuclear power units was about 48.453 billion kwh, a year-on-year increase of 10.76%.
The net profit growth of hydropower enterprises is mostly related to the increase of water quantity and power generation. Among them, Huaneng hydropower said in the announcement that the hydropower cascade storage capacity of the company increased significantly year on year in early 2021, and the inflow of Xiaowan Hydropower Station in the first quarter was 3.4% higher than that of the same period last year; In terms of demand, affected by low temperature, rain and snow in January 2021, the heating power load in Yunnan Province increased sharply.
In addition, Funeng, which operates natural gas power generation, photovoltaic power generation and wind power generation businesses, achieved a net profit of 550 million yuan in the first quarter; The net profit of Dongfang energy, which operates wind power and photovoltaic power generation business, increased by 17.38% year-on-year in the first quarter; Jiangsu Xinneng, which operates wind power generation, biomass power generation and photovoltaic power generation businesses, saw its net profit increase by 6.31% in the first quarter.
Recently, the relevant person in charge of China Photovoltaic Industry Association said that the overall development trend of photovoltaic industry in the first quarter of 2021 is good. According to the data released by the national energy administration, in the first quarter of 2021, the cumulative installed capacity of domestic photovoltaic power generation reached 259gw, a new high.
Operational risk forces transformation
It is worth noting that while many thermal power enterprises are in a situation of loss or profit decline due to coal price rise, some thermal power enterprises have successfully maintained their performance growth by compressing thermal power business and increasing the proportion of installed capacity of new energy and clean energy.
In the first quarter of this year, the company achieved a revenue of 3.51 billion yuan, a year-on-year increase of 40.81%; The net profit attributable to the shareholders of the listed company was 426 million yuan, a year-on-year increase of 61.55%. The reasons for the growth of revenue and net profit include “steady growth of profit contribution of new energy sector”.
It is understood that the company was founded in 1993 with power generation and heating as its core business. In 2017, due to the sharp rise of thermal power fuel cost and other reasons, the non net loss of Jidian reached 337 million yuan. After 2018, Jidian began to rapidly increase the proportion of new energy installed capacity, and the company’s losses also narrowed. The non net losses deducted in 2018 and 2019 were RMB 80 million and RMB 26 million respectively.
In 2020, the company will make a net profit of RMB 323 million, turning losses into profits on a year-on-year basis. In that year, Jidian added 2.43 million kilowatts of wind power and photovoltaic power generation, a year-on-year increase of 71%, and the installed capacity of new energy exceeded that of thermal power. According to the plan, by 2025, the installed capacity of clean energy will account for more than 90%.
Dong Xiang, a financial market expert, said that under the background of the “carbon neutral” policy, the traditional coal and thermal power industries are facing huge operational risks, and the comprehensive transformation to the direction of new energy and clean energy has become an option that traditional coal-fired thermal power enterprises can hardly refuse. In the future, national and local governments may continue to formulate more policies and measures to restrict coal consumption.
In April 2021, the National Energy Administration issued the guidance on energy work in 2021, which further stressed the need to actively promote the construction of new power system with new energy as the main body, and indicated that the expected goal of 2021 – in the energy structure, the proportion of coal consumption should be reduced to below 56%.
Guo Yuxuan also believes that under the general rising trend of the commodity market in 2021, it is difficult for coal prices to reverse in the short term, and this round of rise should continue for some time. It is imperative for power enterprises to shift from coal power generation to new energy power generation, such as photovoltaic and wind power generation.
Beijing Business Daily reporter Qian Yu Pu Zhenyu
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