SDIC Power(SH:600886) SINOLINK SECURITIES·2024-09-18 06:12Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [8][9]. Core Views - The company plans to issue 550 million A-shares at a price of 12.72 RMB per share, aiming to raise up to 7 billion RMB for the construction of the Karla and Mendigou hydropower projects in the Yalong River basin [1][2]. - The total share capital will increase by approximately 7.4%, which is expected to reduce the company's debt-to-asset ratio by about 1.5 percentage points, from 63.8% to 62.3% [2]. - The internal rate of return for the capital of the two hydropower projects is projected to reach 8%, indicating strong profitability potential [2]. - The company has committed to a dividend payout ratio of no less than 55% from 2024 to 2026, which is an increase from the previous commitment of 50% [2]. Financial Projections - The company is expected to achieve net profits attributable to shareholders of 7.71 billion RMB, 8.36 billion RMB, and 9.14 billion RMB for the years 2024, 2025, and 2026, respectively [2][5]. - The projected P/E ratios for the company are 15x, 14x, and 13x for the years 2024, 2025, and 2026, respectively [2][5]. - Revenue is forecasted to grow from 56.71 billion RMB in 2023 to 63.39 billion RMB in 2026, with a compound annual growth rate of approximately 9.79% [5][6]. Business Development - The company is focusing on expanding its clean energy business, with significant investments in hydropower projects that are expected to enhance its operational capacity and financial performance [2][5]. - The Karla and Mendigou hydropower stations are expected to operate in conjunction with the Longtou Reservoir, optimizing peak regulation and maximizing the benefits of cascade compensation in the river basin [2].