GEPIC(SZ:000791) HTSC·2024-07-23 02:12Investment Rating - The report gives a "Buy" rating for the company with a target price of RMB 6.97 [14][13][12] Core Views - The company is expected to benefit from the injection of high-quality thermal power assets, which may lead to a dual increase in profit and valuation [15][13] - The company has a strong potential for profit recovery in hydroelectric power and significant growth potential in renewable energy capacity [14][30] - The company’s net profit for 2024-2026 is projected to grow by 31.6%, 3.9%, and 7.7% year-on-year respectively [3][39][13] Summary by Sections Company Overview - The company is the only listed platform under Gansu Electric Power Investment Group, with a total installed capacity of 354 MW in clean energy as of the end of 2023 [30][54] - The company has committed to injecting thermal power assets by the end of 2025, with the acquisition of Changle Power Plant already initiated [55][30] Financial Performance - In 2023, the company reported a significant increase in revenue and net profit, with year-on-year growth of 29% and 73% respectively [30][39] - The company’s net profit for 2023 was RMB 521 million, with an expected increase to RMB 686 million in 2024 [39][3] Asset Injection and Growth Potential - The injection of Changle Power Plant is expected to enhance the company's net profit by 109% in 2024 and 103% in 2026 [45][38] - The company has a reserve of 7 GW in renewable energy projects, indicating a potential growth space of 3.8 times its current capacity [37][30] Market Position and Competitive Advantage - The company’s renewable energy profit per kilowatt-hour is among the highest in the industry, with a net profit of RMB 0.15 per kWh in 2023 [21][48] - The company is well-positioned to benefit from the ongoing energy market reforms and the increasing demand for clean energy [50][55]