Kaidi Power: Biomass power generation pioneer profitability to be confirmed

Biomass power generation is an important part of renewable energy in China in the next 10 years, as the pioneer of this industry, Kaidi electric power (000939.　　SZ) 's holding company, Kaidi Holdings, has established a first-run advantage in technology, equipment and management, but there is still suspense as to whether the investment theme can be played as the profitability of biomass power plants remains to be confirmed.　　It is reported that Kaidi power of the holding shareholder Kaidi Holdings in 2004 began to enter the biomass power generation market, not only in the independent intellectual property rights have the core technology advantages, but also in equipment and raw materials to occupy the cost advantage. At present, the company per unit kilowatt cost of electricity is about 7000 yuan, far less than the other domestic power plant procurement of imports of equipment about 10000 yuan average cost.　　At the same time, the company's fuel cost is less than 280 yuan/ton, while the fuel cost of other biomass power plants is 380~450 yuan/ton, with the direct acquisition of fuel, the signing of long-term fuel supply agreement with the processing plant, and the establishment of a three-level security system to enhance the self-sufficiency rate. The Yangtze Securities pointed out that Kaidi holdings in the field of biomass power generation early, got the most high-quality biomass power generation projects, in biomass power generation has established a first-hair advantage.　　On the other hand, the NDRC has allowed a county to set up only a biomass power plant, and local governments have introduced tougher policies (not allowing repeat construction within 80 km), making the existing projects of the holding company extremely exclusive. At present, Kaidi Holdings has set up a biomass power generation project company 111, of which 9 have been sold to listed companies, and has commenced construction, of which Qidong power plant has been equipped with ignition conditions, the proposed acquisition of the 11 projects will be started during the year, the end of 2011, 20 power plants will be fully operational　　The holding company also promised that the remaining biomass power generation project companies would be transferred to listed companies at the right time, and that the company would still have continued asset injection forecasts for the future and would be the only listed company in the field with the help of additional acquisitions.　　According to the NDRC's recently promulgated "on the improvement of agricultural and forestry biomass power generation price policy notice," the agricultural and forestry biomass power generation project, starting from July 1 this year, the unified implementation of benchmarking price 0.75 yuan/kwh (including tax). Guo Xin Securities researcher Xu Yingzhen pointed out that Kaidi Power 20 of the building biomass power plant before the policy requirements of the implementation of the biomass electricity price is 0.7170 yuan/kwh, 0.7375 yuan/kwh, 0.7060 yuan/kwh, the adjustment of the project after the production of profitable positive contribution is very obvious.　　According to the new national unified benchmark pricing, the company's profit is expected to be in 20 million ~2500 million, 2011, 2012, the company can achieve net profit of 400 million and 600 million, respectively, equivalent to 0.68 yuan and 1 yuan earnings per share. Although the biomass power generation to kaidi electric power brought a huge space for imagination, but the current business is still in the construction stage, the listed companies have not produced a real profit contribution. China reported that the company's first half of the year to achieve revenue of about 1.53 billion yuan, itsIn the sale of raw coal for 530 million yuan, environmental protection power generation (coal gangue and poor quality) income of 320 million yuan, desulfurization and electricity construction Contract project income of 310 million yuan, other income of about 370 million yuan. Datong Securities Electric Power analyst Cai Wenbin to the first financial daily newspaper, "financial quotient" reporter said: "Although the holding company has a similar asset profitability, can be used as a reference for the analysis, but the actual profitability of listed companies still have uncertainty, is the biggest market controversy." "" The company's development direction is good, but to complete the strategic transformation, enhance profitability will be a long process.　　Zhang Lin, an analyst with the Changjiang Securities energy industry, believes that Kaidi power has "three bottlenecks", namely the price stability of raw materials, the financing of new power plants and national policy support.　　Zhang Lin further explained that, as a large number of straw was acquired, its price is gradually rising, the supply will also be a problem in the future, the construction of biomass power plants need a lot of capital investment, in addition, the state of the Internet tariff subsidies, tax concessions and other subsidies to ensure that the company's profits is currently an Risk: The lack of fuel supply and the risk of price increase, and the risk of change caused by the national policy support.