CPI Website: Economic Profit is the Key Factor for SEP to Transfer to Clean Energy Development

    According to the report of Voice of China on July 21, SEP’s main electricity generation business is the largest power producer in Shanghai. The Company wholly owns four power plants like Wujing Thermal Power Plant, Minhang Power Plant etc. and other power companies. By the end of 2013, the company has approximately 8470MW equity installed capacity throughout the East China region. In the first quarter of this year, SEP’s main business income decreased year-on-year 2.38% and realized 3.795 billion Yuan with 3.13% increase in net profit.

    Since the beginning of this year, the company's stock continued consolidation in the low share price and increased steadily since the end of June. The latest bonus scheme is: 2 Yuan in cash for every 10 shares. Institutions predict that the 2014 net profit will slightly increase compared to last year with 9.72%  increasing rate.

    How is the future development prospects of SEP? A minority stockholder Chen Ling said that as a large volume company especially in East China Region, SEP has fully used the abound local resources and accelerated the new energy development in wind power and solar power. Meanwhile, the company has developed a large number of projects overseas, for instance, photovoltaic project in Japan has realized profitability and Turkey project has high expected revenue as the on-gird power tariffs in Turkey is 50% higher than in China but coal price is 20% cheaper than in China.

    In addition, if the economic recovery can appear this year or the year next, the utilization usage hour of generator unit will increase. But the coal price has kept recession even the local coal price will increase. As the coal supply exceed demand in overseas market and the coal market in America keep shrinking by exploration of shale gas. Therefore, the profit will over expectation by small amount of increase in this market downturn. If there is Four Star as the highest concern index, he will pay Two Star to SEP

    The company’s latest transaction price was 4.57 Yuan, a decline of 1.30%. Is there any investment suggestion to this share (600,021)? A market insider, Yang Huizhong has a new interpretation.

    Yang: SEP is in a transitional process from traditional energy to clean and new energy. Increasing the proportion in clean new energy and expand into overseas market to ensure substantial progress are important developing opportunities for SEP. Fuel cost control is one of the most essential part in economic benefits. The company share has enough increasing space and potential in the long-term.  

   

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