标题：Jiangsu Linyang EnergyComplete the Last Lin in a Closed-Loop Power Supply Chain; Focusing on Electric Power Supplier
发布日期：2016-03-21 9:59:38
内容： Company Profile Jiangsu Linyang Energy (601222: SH) develops, produces and sells electric energymeters, power management information systems, terminal products and other electricalinstrumentation products. The Company's main products include single phaseelectronic energy meters, three phase electronic energy meters, distribut iontransformer monitoring terminal, etc. Event Jiangsu Linyang Energy (the company) plans to establish three subsidiaries in HebeiProvince, Henan Province and Yunnan Province, aiming at expanding its Internet ofEnergy (IoE) and power supply businesses. Comment Distinctive operation model supports the expansion of electricity supply business, animportant link in the close-loop power supply chain. The scope of price reform for powertransmission and distribution expands gradually. The new electricity reform is carriedout at a faster-than-expected pace. The electricity industry is becoming increasinglymarket-oriented, which would spur the fast development of the electricity servicemarket. Jiangsu Linyang Energy has grabbed this opportunity by setting up subsidiarycompanies to expand electricity sale business. With accumulations in distributed powergeneration projects, the company has finished the construction of a close-loop powersupply chain. Given its advantage in power resources, we believe Jiangsu LinyangEnergy shall have strengths in terms of pricing and market order establishment.Fast-spreading power-supply business, high customer stickiness and distinctivebusiness model will continue to ensure Jiangsu Linyang Energy withhigher-than-expected growth. Distributed power generation projects are accelerating. Rapid growth derives from the successive expansion of business scale. The renewable energy quota scheme haskicked off. The electricity generated by non-water energies in eastern China is in severeshortage. The comprehensive tax poses a key concern to suppliers. The localgovernment will increase support for developing new-energy power generation locallywhile stepping up cross-region power transmission. Taking the cost of energy resource, the development expenditure and the return toinvestor into consideration, we concluded that distributed photovoltaic (PV) powergeneration boasts strong advantage. PV will enjoy higher relative return afteradjustment of the PV power benchmark price. To meet the 70GW PV instalment targetby 2020, the industry has to grow at over 50% CAGR for the next 5 years The company has 2GW power project in storage and is expected to have 1GW capacityin operation by the end of 2016, contributing profit of over CNY 300 million. Thecompany.s overall earnings performance will show sustainable growth. Investment Recommendation: Power generation business has provided JiangsuLinyang Energy with steady rapid growth. Transformation into a power sale platformoperator will consolidate the company.s leading position. We give Jiangsu LinyangEnergy ¨OUTPERFORM〃 rating. We estimate its undiluted EPS at CNY 1.40 in 2015,CNY 1.81 in 2016 and CNY 2.38 in 2017, implying 23x 15E PE, 18x 16E PE and 13x17E PE. Potential Risk: PV power unit installation may turn out to be slower than expected
发布日期：2016-03-21 9:59:38
内容： Company Profile Jiangsu Linyang Energy (601222: SH) develops, produces and sells electric energymeters, power management information systems, terminal products and other electricalinstrumentation products. The Company's main products include single phaseelectronic energy meters, three phase electronic energy meters, distribut iontransformer monitoring terminal, etc. Event Jiangsu Linyang Energy (the company) plans to establish three subsidiaries in HebeiProvince, Henan Province and Yunnan Province, aiming at expanding its Internet ofEnergy (IoE) and power supply businesses. Comment Distinctive operation model supports the expansion of electricity supply business, animportant link in the close-loop power supply chain. The scope of price reform for powertransmission and distribution expands gradually. The new electricity reform is carriedout at a faster-than-expected pace. The electricity industry is becoming increasinglymarket-oriented, which would spur the fast development of the electricity servicemarket. Jiangsu Linyang Energy has grabbed this opportunity by setting up subsidiarycompanies to expand electricity sale business. With accumulations in distributed powergeneration projects, the company has finished the construction of a close-loop powersupply chain. Given its advantage in power resources, we believe Jiangsu LinyangEnergy shall have strengths in terms of pricing and market order establishment.Fast-spreading power-supply business, high customer stickiness and distinctivebusiness model will continue to ensure Jiangsu Linyang Energy withhigher-than-expected growth. Distributed power generation projects are accelerating. Rapid growth derives from the successive expansion of business scale. The renewable energy quota scheme haskicked off. The electricity generated by non-water energies in eastern China is in severeshortage. The comprehensive tax poses a key concern to suppliers. The localgovernment will increase support for developing new-energy power generation locallywhile stepping up cross-region power transmission. Taking the cost of energy resource, the development expenditure and the return toinvestor into consideration, we concluded that distributed photovoltaic (PV) powergeneration boasts strong advantage. PV will enjoy higher relative return afteradjustment of the PV power benchmark price. To meet the 70GW PV instalment targetby 2020, the industry has to grow at over 50% CAGR for the next 5 years The company has 2GW power project in storage and is expected to have 1GW capacityin operation by the end of 2016, contributing profit of over CNY 300 million. Thecompany.s overall earnings performance will show sustainable growth. Investment Recommendation: Power generation business has provided JiangsuLinyang Energy with steady rapid growth. Transformation into a power sale platformoperator will consolidate the company.s leading position. We give Jiangsu LinyangEnergy ¨OUTPERFORM〃 rating. We estimate its undiluted EPS at CNY 1.40 in 2015,CNY 1.81 in 2016 and CNY 2.38 in 2017, implying 23x 15E PE, 18x 16E PE and 13x17E PE. Potential Risk: PV power unit installation may turn out to be slower than expected
