SCTE(SH:600674) GF SECURITIES·2024-08-19 01:42Investment Rating - The investment rating for the company is "Buy" with a current price of 18.28 CNY and a reasonable value of 20.78 CNY [1]. Core Views - The company reported a stable growth in performance due to improved water inflow and increased electricity generation, with a 10.2% year-on-year increase in revenue and a 9.7% increase in net profit attributable to shareholders in the first half of 2024 [5][11]. - The investment income for the first half of 2024 was 24.12 billion CNY, a year-on-year increase of 4.88%, with the Yalong River hydropower contributing 21.13 billion CNY, accounting for 87.6% of the total [5][8]. - The company’s financial expenses decreased by 31.37% year-on-year due to the conversion of convertible bonds and declining interest rates, leading to an improvement in self-operated business profits [5][12]. Summary by Sections Section 1: Improved Water Inflow and Increased Electricity Generation - The company achieved a revenue of 6.03 billion CNY in the first half of 2024, reflecting a 10.2% increase year-on-year, and a net profit of 23.03 billion CNY, up 9.7% year-on-year [5][11]. - The Yalong River hydropower's revenue increased by 3.2% year-on-year, contributing significantly to the overall investment income [8][11]. Section 2: Electricity Price Changes and Performance - The average on-grid electricity price decreased by 4.5% year-on-year, with the Yalong River hydropower's price dropping by 2.0% [16][18]. - The company’s electricity generation increased by 17.9% year-on-year, with hydropower generation rising by 18.1% [16][18]. Section 3: Future Growth and Investment Opportunities - The company is expected to enter a peak production phase with the Dadu River project and is advancing the construction of wind and solar projects [2][4]. - The forecast for net profit attributable to shareholders for 2024 to 2026 is 51 billion CNY, 55 billion CNY, and 62 billion CNY respectively, with corresponding P/E ratios of 17.6, 16.2, and 14.4 [1][2]. Section 4: Financial Health and Cash Flow - The company’s total liabilities reached 222 billion CNY, with an asset-liability ratio of 34.9% [11][12]. - Operating cash flow net amount increased by 69.6% year-on-year, reaching 3.2 billion CNY, primarily due to improved water inflow and electricity generation [12][15].