HEGC(SZ:000883) HTSC·2024-09-01 10:03Investment Rating - Investment Rating: Buy [1] - Target Price: RMB 6.80 [1] Core Views - The company's revenue and net profit for 1H24 were RMB 98.21 billion and RMB 14.26 billion, representing year-on-year increases of 8.05% and 58.14% respectively [2] - The significant growth in net profit is attributed to improved water inflow and a decrease in coal prices, leading to a 67.19% increase in hydropower generation and a 281% increase in net profit from thermal power [2][3] - The forecasted net profits for 2024-2026 are RMB 30.26 billion, RMB 32.10 billion, and RMB 34.41 billion respectively [2] Revenue and Profit Analysis - In 1H24, the company's hydropower generation increased by 67.19% to 69.3 billion kWh, resulting in a net profit of RMB 8.69 billion, a 133% increase year-on-year [4] - The thermal power segment saw a 16.54% increase in generation to 112.43 billion kWh, with net profit rising to RMB 4.52 billion [3] - The coal trading revenue decreased by RMB 10.41 billion due to a strategic shift to reduce external coal procurement, but the gross margin for coal trading and storage increased by 17.67 percentage points to 26.25% [3] Future Projections - The company expects to achieve a net profit of RMB 4.46 billion from new energy in 2024, with hydropower and thermal power net assets projected at RMB 137 billion and RMB 41 billion respectively [2] - The estimated PE/PB ratios for 2024 are 14.5 and 2.5, respectively, with a target market value of RMB 442 billion [2][15] Financial Metrics - The company's revenue for 2024 is projected to be RMB 21.022 billion, with a net profit of RMB 3.026 billion, reflecting a growth rate of 73.06% year-on-year [5] - The expected EPS for 2024 is RMB 0.47, with a ROE of 9.04% [5][17] - The company's financial ratios indicate a PE of 10.12 and a PB of 0.88 for 2024 [5][17]