澳大利亚能源与公用事业2020年展望：较低的资本成本意味着较高的股本价值

1、J. P MorganAsia Pacific Equity Research29 November 2019Australian Energy & UtilitiesOutlook 2020: Lower cost of capital means higher equity valuesAustraliaEnergy & Utilities Mark Busuttil AC(61-2) 9003-8619Bloomberg JPMA BUSUTTIL Jimmy Zeng(61-2) 9003 6017J.P. Morgan Securities Australia LimitedThis

2、 report details a significant change we have made to our DCF valuation estimates across our coverage universe. Previously we used 3.5% risk-free rates to calculate WACCs and 2.5% inflation rates for costs and prices. In an environment where low returns are likely to remain, these estimates appear to

3、o high. As well as lowering risk free rates to 2.5% and inflation to 2.0%, we have reduced long-run prices on the basis that corporates are willing to accept lower project returns. These changes result in higher equity values and we have upgraded AGL, Origin and Beach to Overweight. We remain positi

4、ve on Woodside (as our preferred sector pick) and Worley.Reflecting the reality of lower returns in our WACC estimates: We use DCF as our primary valuation technique, and previously used 3.5% risk free rates and 6.5% market risk premiums. These assumptions appear inconsistent with current cash rates

5、 and therefore we have lowered our risk free rate assumption to 2.5% and our market risk premium to 5.0%. In addition, we have assumed lower price and cost inflation as well as lower long-run prices. This result is positive revisions to valuations.Upgrading AGL, Origin and Beach to Overweight; downg

6、rading Infigen to Neutral: While we expect some earnings degradation over time for AGL (largely due to lower wholesale prices), its valuation is attractive and we expect the market to migrate to less cyclical stocks. Origin has been a strong performer compared to peers and market indices, but is one

7、 of the strongest cash flow generators under coverage and should see increased capital returns. Beach has significantly under-performed peers in recent weeks and is now representing far better value while still offering strong growth and exposure to east coast gas markets. We had previously highligh

8、ted the apparent value in Infigen with the stock price well below replacement cost, but this value gap has now closed and the price looks full.We reiterate our Overweight ratings on Woodside and Worley: We believe Woodside is progressing with its important growth projects in WA, while Worley is leve

9、red to an improving E&P capex cycle.Equity Ratings and Price TargetsSource: Company data, Bloomberg, J.P. Morgan estimates, n/c = no change. All prices as of 29 Nov 19.CompanyTickerMkt Cap (A$ mn)Price (A$)Rai ngCurPrice Ta qetCurPrevEndDatePrevEndDateAGL EnergyAGL AU13,164.3620.41OWN24.10Dec-2019.1

10、0Jun-20APA GroupAPA AU12,971.6611.00Nn/c11.40Dec-2010.60Jun-20AusNet ServicesAST AU6,380.581.74Nn/c1.90Sep-20n/cn/cBeach EnergyBPT AU5,469.432.40OWN2.60Dec-202.55Jun-20Infigen EnergyIFN AU630.210.66NOW0.70Dec-200.69Jun-20Oil SearchOSH AU11,344.127.44Nn/c7.40Dec-207.10Jun-20Origin EnergyORG AU15,216.

11、308.70OWN9.50Dec-208.25Jun-20SantosSTO AU16,977.248.15Nn/c8.60Dec-207.85Jun-20Senex Energy LimitedSXY AU495.060.34Nn/c0.36Dec-200.35Jun-20Spark Infrastructure GroupSKI AU3,649.962.17Nn/c2.40Dec-202.35Jun-20Woodside PetroleumWPL AU32,301.3634.51OWn/c40.70Dec-2038.50n/cWorleyParsonsW0RAU7,805.3415.00O

12、Wn/c17.60Dec-2017.50Jun-20See page 54 for analyst certification and important disclosures, including non-US analyst disclosures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of intere

13、st that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.NeutralAPA.AX,APA AUPrice: A$11.00 Price Target: A$11.40Previous: A$10.60AustraliaEnergy & Utilities Mark Busuttil AC(61-2) 9003-8619 Bloomberg JPMA

14、BUSUTTIL J.P. Morgan Securities Australia LimitedPrice PerformanceNov-18 Feb-19 May-19 Aug-19 Nov-19- APA.AX Price (A$) ASX100 (rebased)YTD1m3m12mAbs29.4%3%0%20WRei7.6%-6.8%-4.7%0.2%APA GroupAPAs stock is performing well in a low rateenvironmentThe macro outlook is particularly positive for APA inso

15、far as high dividend yielding stocks should outperform in a low rate environment. We also note that management continues to execute on growth with a number of new projects due to add to revenue and earnings this financial year. That said, the acceleration of the offshore growth strategy brings its o

16、wn risks and uncertainty. Additionally, regulatory changes in the domestic market remain a potential issue fbr the sustainability of APAs core business. While we have increased our valuation on the basis of a lower WACC, we remain Neutral rated given the stock price is in line with our revised price

17、 target.Lower WACC sees NPV rise to A$11.81/share: With high leverage and longlife assets, APA is a key beneficiary of lower discount rates. We have lowered our WACC from 6.3% to 4.6%. We have also lowered revenue and cost inflation rates as well as returns from growth projects. The net impact of th

18、ese changes is a 15% uplift to our (rolled forward) NPV. We note that our valuation is now well above last years failed CKI offer at A$11/share.Acceleration of offshore growth strategy potentially increases risk: We believe the key risk for APA is the viability of their growth. The company has a ver

19、y strong track record of inorganic growth, and (more recently) finding opportunities to deploy capital in pipeline expansions, midstream assets and renewable power plants. However, more recently APA has accelerated its investigation into pursuing growth projects overseas. It is difficult to judge ho

20、w successful this strategy will be. There are numerous cases of Australian companies with failed overseas ventures. However, we believe APA has the right approach: recognizing its key competitive advantage is its balance sheet.Regulation remains a potential issue for APA: Since the release of the Ve

21、rtigan report in December 2016 there have been a number of changes to gas transportation regulation. One notable change is the introduction of mandatory day ahead auctioning of uncontracted capacity. This commenced in March 2019 and the volumes sold under day ahead auctions have increased materially

22、.Remain Neutral rated: Our price target is the average of our DCF, 14x EV/EBITDA and our dividend discount model.NeutralAPA Group (Reuters: APA.AX, Bloomberg: APA AU)Company DataYear-end Jun (A$)FY18AFY19AFY20EFY21EFY22EShares 0/S (mn)1,179Revenue (A$ mn)2,3872,4522,6142,6132,68752-week range (A$)Ad

23、j. EBITDA (A$ mn)1,5181,5741,6821,6821,731Market cap ($ mn)8,781.84EBITDA margin63.6%64.2%64.4%64.3%64.4%Exchange rate1.48Adj. net income (A$ mn)265288364370411Free float(%)99.9%Adj. EPS (A$)10.310.353M - Avg daily vol (mn)2.32BBG EPS (A$)0.220.260.290.32-3M - Avg daily val ($ mn)17.6Repo

24、rted EPS (A$)10.310.35Volatility (90 Day)20DPS (A$)0.450.500.500.540.55IndexASX 100Dividend yield4.1%4.5%4.5%4.9%5.0%BBG BUYIHOLDISELL0I9I2Adj. P/E47.645.135.735.031.6Source: Company data, Bloomberg, J.P. Morgan estimates.Changes to earnings estimates and valuationAs shown below, we have

25、lowered our earnings estimates due to lower returns from organic growth projects and lower inflation. However, our NPV increases 15% due to our lower WACC calculation and because we have rolled forward to December 2020.Table 5: Changes to earnings estimates and valuationRevenueEnergy InfrastructureA

26、$mAsset managementA$mEnergy InvestmentsA$mOtherA$mRevenueEnergy InfrastructureA$mAsset managementA$mEnergy InvestmentsA$mOtherA$mTotal segment revenueA$mTotalA$mNewFY2020E OldChangeNewFY2021E OldChangeNewFY2022E OldChange2,0382,0370%2,0362,053-1%2,0962,130-2%1401410%142144-1%145148-2%30300%3131-1%31

27、32-2%00NM00NM00NM2,2082,2080%2,2092,228-1%2,2732,309-2%2.6142,6140%2,6132,636-1%2.6872,730-2%RevenueEnergy InfrastructureA$mAsset managementA$mEnergy InvestmentsA$mOtherA$mTotal segment EBITDAA$mEBITA$m1 2 24 10 0 8 76 8 3-70%0%0%0%0%0%4 3 118 8 8 3-7F Q5 3 12 9 9f 8 3-7E Q8 1 98 4 13 3 3 8 377 /5 9

28、 7,718632-74,75,16G/2 2 2 2 2 2 Underlying NPAT Reported NPAT EPS - underlying DPS NPV-A$mA$m3643640%3643640%370381-3%370381-3%411431-5%411431-5%Ac/securityAc/security31310%50500%3132-3%5454-1%3537-5%5556-2%A$mA$/security13,94012,16315%11.8110.3115%Source: J.P. Morgan estimates.Our estimates versus

29、consensusAs shown below, we are broadly in line with consensus for each of the next three years. Our forecasts imply EBITDA growth of 7% in FY2020, 0% in FY2021, and 3% in FY2022.Investment Thesis, Valuation and RisksAPA Group (Neutral; Price Target: A$11.40)Investment ThesisAPA Group owns and opera

30、tes Australias largest natural gas infrastructure business and other energy infrastructure assets such as gas storage and wind farms. With the stock trading marginally above our price target, we remain NeutralValuationOur December 2020 (rolled forward) price target of A$ 11.40/share is the average o

31、f our DCF, dividend discount, and 14x forward EV/EBITDA valuations. Our DCF valuation is at 6.33% post-tax WACC.Risks to Rating and Price TargetUpside and downside risks include: interest rates rising/falling more than J.P.Morgan Rates Strategy forecasts suggest; potential for re-regulation of asset

32、s; east coast demand destruction putting downward pressure on tariff revenue; and growth adding to value.APA GroupRelative recommendation:NeutralA$ in millions, year end JunProfit And LossFY18FY19FY20EFY21EFY22EValuation SummaryA$mA$psRevenue2,3872,4522,6142,6132,687Current mkt capitalisation12,971.

33、6611.00Revenue growth2.6%2.7%6.6%(0.0%)2.8%COGS-Price Target11.40Operating Expenses(846)(856)(909)(909)(934)Capital growth to price target3.6%EBITDA1,5181,5741,6821,6821,731EBITDA grofth3.3%3.6%6.9%(0.0%)2.9%Trading MultiplesFY18FY19FY20EFY21EFY22EEBITDA margin63.6%64.2%64.4%64.3%64.4%PE Pre-abnorma

34、ls47.645.135.735.031.6Amortisation00000PE Reported47.645.135.735.031.6Depreciation(579)(611)(610)(600)(591)EV/EBITDA15.014.713.813.913.5EBIT9409621,0721,0821,139EV/EBIT21.620.6Other Income-Other Expenses00000Key RatiosFY18FY19FY20EFY21EFY22ENet Interest(510)(497)(510)(510)(510)Dividend Y

35、ield4.1%4.5%4.5%4.9%5.0%Pre-Tax Profit430465562571629Franking0.0%0.0%0.0%0.0%0.0%Tax(165)(177)(198)(201)(218)Return on Assets (%)1.7%1.9%2.4%2.5%2.8%Tax Rate38.4%38.1%35.3%35.2%34.6%Return on Equity (%)6.5%7.5%10.5%11.5%13.8%Minorities00000ROIC (%)-Abnormals (post tax)00000Reported NPAT2652883643704

36、11LeverageFY18FY19FY20EFY21EFY22EGearing (Net Debt / Equity)3.33.6Normalised NPAT265288364370411Gearing (ND / (ND + E)69.8%73.4%75.0%76.5%78.1%Growth11.8%8.8%26.2%1.9%11.1%Net Debt / EBITDA6.05.9EBIT Interest Cover (x)2.12.2End of Period Shares1,1471,1801,1801,1801,180EFPO

37、WA1,1471,1801,1801,1801,180Balance SheetFY18FY19FY20EFY21EFY22ECash101355329230125Reported EPS10.310.35Receivables252250192195205Normalised EPS10.310.35Investments-Growth8.5%5.8%26.2%1.9%11.1%Inventories5668686868Other Current Assets4145474748DPS0.450.500.500.540.55Total Curren

38、t Assets449718635540446Growth3.4%11.1%0.0%7.0%3.3%Net PPE9,6929,7969,6379,4959,371Total Intangibles4,1763,9933,9933,9933,993DPS正PS payout194.9%204.8%162.3%170.4%158.5%Other Non Current Assets911927927927927Total Non Current Assets14,77814,71614,55714,41514,291Cash Flow StatementFY18FY19FY20EFY21EFY2

39、2ETotal Assets15,22715,43415,19214,95514,737Net Profit for Cashflow265288364370411Creditors382302328331341Depreciation & Amortisation579611610600591Current Borrowings329445000Non Cash ItemsCurrent Tax Provisions-Working Capital ChangesOther Current Provisions8495959595Other Operating Cashflows188113

40、82(0)(1)Other Current Liabilities160165165165165Cashflow from Operating Activities1,0321,0121,0569701,001Total Current Liabilities9551,007588591601Non Current Creditors53333Capex(875)(581)(451)(458)(467)Non Current Borrowings9,3219,86610,31010,31010,310Net Acquisitions(0)000Deferred Tax Liabilities5

41、58544544544544Other Investing cashflows(122)000Other Non Current Provisions-Investing Cash Flow(876)(703)(451)(458)(467)Other Non Current Liabilities189325325325325Total Non Current Liabilities10,14610,82811,27211,27211,272lnc/(Dec) in Borrowings(452)494000Total Liabilities11,10011,83511,86111,86411

42、,874Equity Issued5050000Equity4,3184,0684,0684,0684,068Dividends Paid(355)(402)(472)(457)(479)Other Equity00(0)00Other Financing Cashflows(148)(147)(159)(154)(161)Reserves(331)(599)(599)(599)(599)Financing Cash Flow(450)(55)(631)(611)(640)Retained Profits140131(137)(377)(606)Outside Equity Interests

43、-Net Cash Flow(294)254(26)(98)(106)Total Shareholders Equity4,1273,5993,3323,0922,863Net Debt9,5509,9559,98110,08010,186Source: Company reports and J.P. Morgan estimates.AusNet ServicesNeutralAST.AX,AST AUPrice: A$1.74Price Target: A$1.90AustraliaEnergy & Utilities Mark Busuttil AC(61-2) 9003-8619 B

44、loomberg JPMA BUSUTTIL J.P. Morgan Securities Australia LimitedPrice Performance2.0 iNov-18 Feb-19 May-19 Aug-19 Nov-19一 AST.AX Price (A$ ASX100YTD、eba,附) 3m 12m11.9%62%Z8%9.8%Abs -9.9%-7.7%-8.1%-10.0%ReiDividend growth likely tempered as regulatory resets impact revenueSimilar to other network serv

45、ice providers, AusNet continues to face political and regulatory headwinds. With electricity generation becoming more decentralized, there should be good opportunities for investment in grid strength and augmentation. However, the Government is committed to lowering retail prices and rates of return

46、 on investment are coming down. AusNet flagged moderating dividends at its recent interim result and we believe this could be a headwind for the stock. We retain our Neutral rating.Lower WACC calculation increases NPV by 15%: While we have not changed our risk free rate in our AusNet WACC calculatio

47、n (we had previously used 2.5%), we have lowered the market risk premium to 5.0%. This sees our WACC drop from 6.0% to 4.3%. We have also revised our long-run regulatory returns lower. The net impact is our September 2020 NPV increases 15% to A$2.07/share.Downward pressure on upcoming regulatory res

48、ets: AusNet will see regulatory resets for all three of its businesses between mid-CY2021 and the end of CY2022. Similar to Spark (who has an upcoming regulatory reset with SA Power Networks), we expect to see downward pressure on rates of return, and even possibly capex allowance. These changes are

49、 likely to bring about another step down in regulated revenues. We believe this could more than offset growth within Mondo (the entity that contains unregulated assets).Dividend growth likely tempered: At its recent interim results conference call, management noted that: The Board has taken a long-t

50、erm view when setting dividends and looking beyond the particular reset period. AusNet has a track record of moderating its growth profile as required and the company intend to do so going forward； We forecast total distributions of 10.2cps in FY2020 (in line with guidance), increasing 3% to 10.5cps

51、 in FY2021 and 3% to 10.8cps in FY2022. This compares to the historical growth rate of 3% since FY2014.Retain Neutral rating: Our price target is the average of our NPV, 1.35x RAB and our dividend discount model.NeutralCompany DataYear-end Mar (A$)FY18AFY19AFY20EFY21EFY22EShares 0/S (mn)3,667Revenue

52、 (A$ mn)1,9101,8621,9261,9782,07552-week range (A$)Adj. EBITDA (A$ mn)1,1431,1341,1661,1731,243Market cap ($ mn)4,319.67EBITDA margin59.8%60.9%60.6%59.3%59.9%Exchange rate1.48Adj. net income (A$ mn)291254286289276Free float(%)49.2%Adj. EPS (A$)0.080.070.080.080.083M - Avg daily vol (mn)7.78BBG EPS (

53、A$)0.080.070.070.07-3M - Avg daily val ($ mn)9.5Reported EPS (AS)0.080.070.080.080.08Volatility (90 Day)18DPS (A$)0.010.11IndexASX 100Dividend yield5.3%5.6%5.9%6.0%6.2%BBG BUYIHOLDISELLWAdj. P/E21.624.822.121.822.9AusNet Services (Reuters: AST.AX, Bloomberg: AST AU)Source: Company data,

54、Bloomberg, J.P. Morgan estimates.Changes to earnings estimates and valuationWe have lowered our FY2021 and FY2022 estimates assuming lower regulated returns and lower margins from unregulated businesses. However, our NPV increases because of the lower discount rate.Table 6: Changes to earnings estim

55、ates and valuationSource: Company reports and J.P. Morgan estimates.NewFY2020E OldChangeNewFY2021E OldChangeNewFY2022E OldChangeRevenueA$m1,9261,9260%1,9782,040-3%2,0752,142-3%Operating ExpensesA$m-1,214-1,2140%-1,265-1,275-1%-1,301-1,316-1%EBITA$m7127120%713765-7%774826-6%PBTA$m4084080%413468-12%39

56、4442-11%Normalised NPATA$m2862860%289328-12%276309-11%NPVA$m7,3416,51813%A$/share2.031.8013%Investment Thesis, Valuation and RisksAusNet Services (Neutral; Price Target: A$1.90)Investment ThesisAusNet Services is a diversified energy delivery networks business. AST owns and operates electricity and

57、gas networks in Victoria. AusNet remains one of our preferred regulated utility companies on the basis of good dividend cover and valuation support. The company is also anticipating strong growth in its contracted asset base. However, with the stock trading close to our price target, we have a Neutr

58、al rating.ValuationOur September 2020 price target is the average of three valuation methods:NPV of A$2.03/share using a 6.0% post-tax nominal WACC (Beta of 0.891, Cost of Debt of 6.5%);1.35x EV/RAB which values the company at A$2.02/share; andOur dividend discount model uses a 7.5% discount rate, w

59、hich values SP Ausnet at A$1.72/share inclusive of imputation credits.Risks to Rating and Price TargetUpside and downside risks include: Higher-than-expected operating costs; adverse regulatory reviews impacting asset company revenue; and higher or lower than expected benchmark interest rates. Stron

60、ger/weaker than anticipated growth in unregulated, contracted energy services.AusNet ServicesRelative recommendation:NeutralA$ in millions, year end MarProfit And LossFY18Revenue1,910Revenue grovvth6.8%COGS-Operating Expenses(767)EBITDA1,143EBITDA growth16.7%EBITDA margin59.8%Amortisation0Depreciati