XINJI ENERGY(SH:601918) KAIYUAN SECURITIES·2024-08-13 08:18Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is steadily advancing its coal-electricity integration, with recent developments such as the successful grid connection of the Phase II Unit 3 of the Lixin Power Plant, which is expected to enhance its operational performance in the second half of the year [2][3] - The company anticipates marginal growth in its fundamentals, with coal business calorific value expected to increase from 4400K to 4500K, and production volume recovering due to regulatory easing in Anhui [2] - The electricity business is projected to see a rise in on-grid electricity volume during peak usage periods, with additional contributions from new power plants expected in 2024 [2] - The company maintains its profit forecasts for 2024-2026, expecting net profits of 2.51 billion, 2.71 billion, and 3.19 billion yuan respectively, with year-on-year growth rates of +19.0%, +7.8%, and +18.0% [2][3] Financial Summary - Revenue is projected to grow from 12.84 billion yuan in 2023 to 16.30 billion yuan in 2026, with a compound annual growth rate (CAGR) of approximately 15.5% [3][4] - The net profit is expected to increase from 2.11 billion yuan in 2023 to 3.19 billion yuan in 2026, reflecting a strong growth trajectory [3][4] - The company's gross margin is forecasted to improve from 39.7% in 2023 to 54.3% in 2026, indicating enhanced operational efficiency [3][4] - The earnings per share (EPS) is projected to rise from 0.81 yuan in 2023 to 1.23 yuan in 2026, showcasing the company's profitability growth [3][4] Valuation Insights - The company is currently valued at a price-to-earnings (P/E) ratio of 8.9, which is significantly lower than its peers, indicating a potential undervaluation [2][3] - The report highlights that the company's coal-electricity integration is expected to enhance its profitability stability and may lead to a higher valuation premium in the future [2] - The company is also positioned to benefit from a high dividend potential as it completes its capital expenditure phase, with an anticipated increase in dividend payouts [2]