Huaihe Energy(600575) 长城证券·2024-09-05 03:10Investment Rating - The report assigns an "Accumulate" rating for Huaihe Energy, marking the first coverage of the company [1]. Core Views - The company's electricity business has seen significant growth, leading to a notable improvement in profitability across the sector [1]. - For the first half of 2024, Huaihe Energy reported a revenue of 15.822 billion yuan, a year-on-year increase of 14.74%, with a net profit attributable to shareholders of 575 million yuan, up 58.94% year-on-year [2]. - The company has a robust coal supply and transportation business, with a focus on sustainable development and stable profit distribution policies [3][4]. Financial Performance Summary - Revenue and Profitability: - Revenue for 2022 was 25.382 billion yuan, increasing to 27.333 billion yuan in 2023, with projections of 31.870 billion yuan for 2024 [1]. - Net profit attributable to shareholders rose from 284 million yuan in 2022 to 840 million yuan in 2023, with an expected increase to 1.164 billion yuan in 2024 [1]. - The company's gross profit margin for the electricity business was 39.10% in the first half of 2024, up 2.01 percentage points year-on-year [3]. - Earnings Per Share (EPS): - The latest diluted EPS was 0.22 yuan in 2023, projected to rise to 0.30 yuan in 2024 and 0.32 yuan in 2026 [1][4]. - Return on Equity (ROE): - ROE improved from 4.0% in 2022 to 7.1% in 2023, with expectations of reaching 9.3% in 2024 [1]. Business Growth and Strategy - Electricity Generation: - The company generated 8.679 billion kWh of thermal power in the first half of 2024, a year-on-year increase of 27.81% [2]. - The average selling price of electricity was 408.31 yuan/MWh, with a slight decrease of 0.15% year-on-year, while the unit cost of electricity sold decreased by 3.29% [2]. - Coal Supply and Transportation: - The coal supply business reached a record high of 15.61 million tons in the first half of 2024, up 33.08% year-on-year [3]. - The railway freight volume remained stable at 24.97 million tons, with a slight decrease of 0.12% year-on-year [3]. - Future Outlook: - The company plans to implement a stable profit distribution policy, prioritizing cash dividends while also considering stock options [3][4]. - The acquisition of Panji Power Plant is expected to enhance the company's sustainable development capabilities [4]. Financial Projections - Revenue projections for 2024-2026 are 31.870 billion yuan, 32.870 billion yuan, and 34.847 billion yuan respectively, with net profits expected to be 1.164 billion yuan, 1.220 billion yuan, and 1.235 billion yuan [4].