Shanghai Electric: Nuclear power business will meet the peak revenue confirmation

Operating income increased by 8.11% and net profit increased by 17.40%. In 2011, the company's operating income was 68.302 billion yuan, an increase of 8.11% year-on-year; net profit attributable to shareholders of listed companies was 3.31 billion yuan, an increase of 17.40% from the same period of last year. The decline in government subsidies dragged down the performance of the company. Net profit after deducting non-recurring gains and losses soared by 44.97% year-on-year; EPS 0.26 yuan was basically in line with market expectations.

The thermal power is expected to bottom out and the gas generating units usher in opportunities. The number of hours of use of thermal power units in China has risen for two consecutive years, and investments in thermal power construction investment declines year after year are expected to be contained. The quick-start feature makes gas-fired units the main route for the optimization of wind and solar access on the grid side. We believe that gas-fired generating units usher in good opportunities in the context of the gradual advancement of the West-to-East Gas Transmission and renewable energy quota system. The company has orders for over 90 billion yuan in thermal power. The thermal power business will grow steadily in the next few years.

AP1000 localization platform ushered in the peak of nuclear power revenue confirmation. The restart of nuclear power is gradually approaching. The company is the third-generation nuclear power technology AP1000 localization platform. The nuclear power equipment industry chain is complete, benefiting significantly. In the short term, the company will usher in the peak of revenue recognition for nuclear power business in 2012. We estimate that there will be 15 reactors supplied by the company and due for delivery in 2012, and the design value will exceed RMB 15 billion.

Sea and land together, wind power business upstream. The company cooperated with Siemens to enter the offshore wind power market. In 2011, revenue from wind power products reached 3.487 billion yuan, a year-on-year increase of 15.8%. At the same time, new wind power orders exceeded 6 billion yuan, a record high. Under the background of sluggish industry, the growth of wind power business highlights the strong competitiveness of the company. We are optimistic that the company will stand out in the fierce competition in the industry and become one of the few companies that finally share industry opportunities.

Give a "recommended" rating. It is expected that the company's 2012 to 2014 EPS will be 0.31/034/0.40 yuan, respectively, corresponding to PE is 18.22/16.62/14.13 times. Considering that the company is highly competitive in the industry and the barriers to entry in the industry are high, it gives a "recommended" rating. risk. Thermal power investment continued to decline. Nuclear power restart time is uncertain.