HPI(600011) 长江证券·2024-09-12 07:41Investment Rating - The report maintains a "Buy" rating for the company, with a target PE of 8.07x for 2024, 6.99x for 2025, and 6.34x for 2026 [6][5] Core Views - The company's controlling shareholder, through its affiliated fund, has announced a significant share purchase plan, demonstrating strong confidence in the company's long-term development [1][4] - The company's current PE (TTM) valuation is 10.4x, which is at the 19th percentile of the past decade, and the 2024 expected PE is even lower at 8.07x, indicating undervaluation [1][4] - The power industry's fundamentals are improving, with coal power's role as a flexible regulator being increasingly recognized, which will benefit the company as the largest listed power company in terms of coal-fired capacity [4][5] Industry and Company Analysis Shareholder Confidence - The controlling shareholder's affiliated fund purchased 0.0956% of the company's shares on September 9, 2024, and plans to increase its stake by 0.15% to 0.21% within three months [1][4] - The controlling shareholder and its affiliates currently hold 46.19% of the company's shares, with plans to transfer an additional 0.06% stake from another affiliated entity [4] Valuation and Performance - The company's Q2 2024 net profit attributable to shareholders was RMB 2.858 billion, down 29.58% YoY, primarily due to weak wind and solar conditions and high hydropower generation [4] - The company's PE (TTM) valuation has declined to 10.4x as of September 11, 2024, which is at the 19th percentile of the past decade [1][4] Industry Trends - Coal power generation is expected to recover as electricity demand rebounds and hydropower generation normalizes [5] - Coal prices have shown signs of decline, with the Q5500 coal price at Qinhuangdao Port dropping 3.5% YoY to RMB 842/ton on September 6, 2024, easing cost pressures for the company [5] Financial Projections - The company's EPS is projected to be RMB 0.79, RMB 0.91, and RMB 1.01 for 2024, 2025, and 2026, respectively [5] - Net profit attributable to shareholders is expected to grow from RMB 12.413 billion in 2024 to RMB 15.786 billion in 2026 [11]