DEC(600875) Huaxin Securities·2024-09-11 00:00Investment Rating - The report assigns a "Buy" rating for the company, marking the first coverage [2][5]. Core Views - The company, Dongfang Electric (600875.SH), is a leading global supplier of power generation equipment and a contractor for power plant engineering. The company reported a revenue of 33.457 billion yuan for H1 2024, representing a year-on-year growth of 11.84%. However, the net profit attributable to shareholders was 1.691 billion yuan, a decline of 15.52% year-on-year [2][3]. Summary by Sections Performance Overview - In H1 2024, the company achieved a revenue of 33.457 billion yuan, up 11.84% year-on-year. The net profit attributable to shareholders was 1.691 billion yuan, down 15.52% year-on-year. The gross margin was 15.36%, a decrease of 2.07 percentage points, while the net margin was 5.49%, down 1.65 percentage points [2][3]. Revenue Breakdown - The revenue from the "Clean and Efficient Energy Equipment" segment was 14.1 billion yuan, a year-on-year increase of 41%. The revenue from coal power, gas turbines, and nuclear power equipment was 8.5 billion, 3.6 billion, and 1.9 billion yuan, respectively, with year-on-year growth rates of 16%, 154%, and 60% [2][3]. Order Growth - The company added effective orders worth 56.073 billion yuan in H1 2024, a year-on-year increase of 14.77%. The breakdown of new orders includes 25.339 billion yuan from clean and efficient energy equipment, 14.058 billion yuan from renewable energy equipment, and 5.731 billion yuan from engineering and trade [3][5]. Shareholder Returns - The company has a dividend policy that increases the payout ratio by 5 percentage points each year from a base of 31.34% in 2021, reaching 41.71% in 2023, ensuring stable returns for shareholders [4]. Profit Forecast - The forecast for the company's revenue from 2024 to 2026 is 71.834 billion, 82.083 billion, and 91.235 billion yuan, respectively. The expected earnings per share (EPS) for the same period are 1.21, 1.52, and 1.80 yuan, with corresponding price-to-earnings (PE) ratios of 10.5, 8.3, and 7.0 [5][6].