SCTE(600674) GF SECURITIES·2024-10-15 06:39Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 20.78 CNY per share based on a 20x PE valuation for 2024 [5][3]. Core Views - Improved water inflow has led to increased electricity generation and stable profit growth. The company reported a net profit attributable to shareholders of 4.422 billion CNY for the first three quarters of 2024, a year-on-year increase of 15.10%, with Q3 net profit reaching 2.120 billion CNY, up 21.55% year-on-year. This growth is primarily driven by increased electricity generation from the Yalong River, contributing to an investment income of 4.505 billion CNY, up 11.01% year-on-year [2][3]. - The Yalong River's electricity generation is expected to see a sequential increase in profit growth for Q3 due to improved water conditions. The report estimates a 26% year-on-year increase in electricity generation for Q3, with July, August, and September showing increases of 89%, 23%, and a decrease of 8% respectively. The electricity price for Q3 has increased by 14.7% year-on-year to 0.289 CNY/kWh [2][3]. - High water levels enhance the company's ability to adjust electricity generation, with significant growth potential from the Yalong River and Dadu River projects. The company plans to invest 7.2 billion CNY in the Yalong River, with several hydropower stations in the Dadu River nearing completion, which will improve performance flexibility [2][3]. Financial Summary - The company achieved a revenue of 14.82 billion CNY in 2023, with a growth rate of 4.4%. The projected revenues for 2024, 2025, and 2026 are 15.99 billion CNY, 16.54 billion CNY, and 20.66 billion CNY, respectively, with growth rates of 7.9%, 3.4%, and 24.9% [4][10]. - The net profit attributable to shareholders for 2023 is projected at 4.4 billion CNY, with expected growth rates of 25.2%, 15.1%, and 8.9% for the following years [4][10]. - The company's earnings per share (EPS) for 2023 is 0.99 CNY, with projections of 1.04 CNY, 1.13 CNY, and 1.27 CNY for the subsequent years [4][10].