DHEP(SH:600744) Hua Yuan Zheng Quan·2024-08-28 23:00Investment Rating - The report assigns an "Accumulate" rating to Huayin Power, indicating a positive outlook for the company's stock performance [2][4][22]. Core Insights - Huayin Power, a major thermal power generation company in Hunan Province under the China Datang Corporation, is undergoing a transformation towards renewable energy, with a current installed capacity of 6.5 GW and a strategic goal to exceed 50% clean energy capacity by the end of the 14th Five-Year Plan [2][6][19]. - The company has faced challenges in its thermal power segment due to high coal prices but is expected to see a recovery in profitability as coal prices stabilize and new projects come online [6][16]. - The renewable energy segment has shown strong profitability, with net profits of 336 million yuan in 2023, supported by high electricity prices in a tight supply-demand environment [17][18]. Summary by Sections 1. Company Overview - Huayin Power is primarily engaged in thermal power generation, with a significant portion of its capacity located in Hunan Province. As of the end of 2023, the company had 652.3 MW of operational capacity, with thermal power accounting for 482 MW, representing 18.71% of the province's total thermal power capacity [2][11][12]. 2. Thermal Power Segment - The company operates four thermal power plants and is currently constructing two 1,000 MW units at the Zhuzhou plant, expected to enhance profitability upon completion in 2026. The thermal power segment has seen a recovery in gross margins, approaching zero in 2023, as coal prices have declined [2][16][22]. 3. Renewable Energy Segment - Huayin Power has 1.5 GW of renewable energy capacity, with wind and solar power accounting for one-third and two-thirds, respectively. The company is actively expanding its renewable energy projects, with an additional 1.7 GW under construction, aiming for a clean energy capacity exceeding 50% by the end of the 14th Five-Year Plan [2][17][19]. 4. Profit Forecast and Valuation - The report forecasts Huayin Power's net profits to reach 35 million yuan in 2024, 133 million yuan in 2025, and 272 million yuan in 2026, with significant growth rates of 279.91% and 104.27% for 2025 and 2026, respectively. The current stock price corresponds to a PE ratio of 175, 44, and 21 for 2024, 2025, and 2026 [3][4][22].