Huaneng Hydropower(SH:600025) Guotou Securities·2024-08-29 10:00Investment Rating - The investment rating for Huaneng Hydropower is "Buy - A" with a target price of 12.5 CNY for the next six months [4]. Core Views - The company reported a significant increase in performance, with a 13.1% year-on-year growth in revenue to 11.88 billion CNY and a 22.47% increase in net profit to 4.169 billion CNY in the first half of 2024 [1][2]. - The increase in electricity generation was driven by favorable water conditions in the Lancang River basin, leading to a 12.36% rise in total electricity output to 462.72 billion kWh [2]. - The company is expanding its hydropower capacity, with the successful commissioning of the first unit of the Toba Hydropower Station and plans for further projects, which will enhance short-term performance [3]. Summary by Sections Financial Performance - In the first half of 2024, the company achieved a revenue of 11.88 billion CNY, a 13.1% increase year-on-year, and a net profit of 4.169 billion CNY, up 22.47% [1]. - The average on-grid electricity price increased slightly to 0.257 CNY/kWh, reflecting a tight supply-demand balance in Yunnan province [2]. Capacity Expansion - The company’s hydropower capacity increased from 22.95 GW to 25.6 GW following the acquisition of Huaneng Sichuan Energy Development Co., Ltd. [3]. - The Toba Hydropower Station, with a capacity of 1.4 million kW, is expected to be fully operational by December 2024, contributing to future revenue growth [3]. Future Projections - Revenue projections for 2024-2026 are 26.275 billion CNY, 28.836 billion CNY, and 30.263 billion CNY, with corresponding net profits of 8.936 billion CNY, 10.232 billion CNY, and 10.884 billion CNY [9]. - The company plans to invest 139.91 billion CNY in 84 new energy projects, aiming to add 3.09 million kW of capacity in 2024 [3].