SCTE(600674) HTSC·2024-10-15 02:03Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 21.07 [1]. Core Views - The company's net profit attributable to shareholders for Q3 2024 met expectations, with investment income from hydropower increasing by 20% year-on-year [1]. - For the first nine months of 2024, the company's revenue and net profit attributable to shareholders were RMB 10.87 billion and RMB 4.42 billion, respectively, representing year-on-year increases of 6.5% and 15.1% [1]. - The company plans to increase its investment in the Yalong River hydropower project by RMB 7.2 billion, which may raise its debt-to-asset ratio [1][3]. Summary by Sections Financial Performance - In Q3 2024, the company's revenue and net profit attributable to shareholders were RMB 4.83 billion and RMB 2.12 billion, respectively, showing year-on-year growth of 2.1% and 21.6% [1]. - The investment income from joint ventures and associates increased by RMB 331 million year-on-year, contributing 88% to the net profit growth [1]. - The company expects net profits for 2024-2026 to be RMB 5.07 billion, RMB 5.27 billion, and RMB 5.57 billion, with corresponding EPS of RMB 1.04, RMB 1.08, and RMB 1.14 [1]. Hydropower and Financial Metrics - The company's hydropower generation in Q3 2024 increased by 1.3% year-on-year to 2.193 billion kWh, with the on-grid electricity price rising by 4.6% to RMB 0.167 per kWh [2]. - The financial expenses decreased by 17% year-on-year to RMB 128 million in Q3 2024, continuing a downward trend [2]. - The company’s financial metrics for 2024E include a PE ratio of 17.42x and a PB ratio of 2.19x [4]. Future Outlook - The company is optimistic about the long-term value enhancement from the integrated development of hydropower, wind, and solar energy at the Yalong River project [1]. - The target price adjustment from RMB 22.20 to RMB 21.07 reflects the anticipated growth and market conditions [1].