SCTE(SH:600674) Guotai Junan Securities·2024-08-17 12:23Investment Rating - The report maintains a "Buy" rating for the company, with a target price raised to 22.04 yuan based on a 19x PE for 2024 [3][5]. Core Insights - The company's consolidated business continues to recover in Q2 2024, despite short-term disruptions in electricity prices due to changes in water inflow during the dry season in the Yalong River basin. The long-term growth potential for installed capacity in the Yalong River basin remains significant [3]. - Q2 2024 performance was below expectations, with revenue of 600 million yuan, a year-on-year increase of 10.2%, and a net profit attributable to shareholders of 2.3 billion yuan, up 9.7% year-on-year. The revenue for Q2 2024 was 350 million yuan, a 16.4% increase year-on-year, with a net profit of 1.03 billion yuan, up 7.0% year-on-year, aligning with previous performance guidance [3]. - The report highlights that the Yalong River's electricity generation in Q2 2024 was 18.5 billion kWh, a 37.4% increase year-on-year, while the on-grid electricity price was 0.309 yuan/kWh, down 9.6% year-on-year. This decline in price is attributed to a significant increase in electricity generation during the wet season compared to the previous year [3]. Financial Summary - For 2024, the company is projected to have an EPS of 1.16 yuan, with revenue expected to reach 1.51 billion yuan, reflecting a 2.1% increase year-on-year. The net profit attributable to shareholders is forecasted at 5.68 billion yuan, a 29.0% increase year-on-year [4][11]. - The company's gross profit margin for Q2 2024 was 44.9%, an increase of 3.3 percentage points year-on-year, and financial expenses decreased by 50 million yuan year-on-year to 110 million yuan [3]. - The report indicates that the Yalong River basin has a planned total installed capacity of 100 GW, with over 20.8 GW already in operation as of the end of H1 2024, suggesting substantial future growth potential [3].