HPI(600011) 华龙证券·2024-11-09 08:36Investment Rating - The report maintains a "Buy" rating for Huadian International (600011 SH) [1] Core Views - Huadian International's Q3 2024 revenue was RMB 655 90 billion, up 0 46% YoY and 22 74% QoQ, while net profit attributable to shareholders was RMB 29 59 billion, down 52 69% YoY but up 3 55% QoQ [1] - The decline in revenue was mainly due to a 2 63% YoY drop in average settlement electricity price to RMB 496 27 per MWh, despite a 1 14% YoY increase in electricity generation [1] - Net profit was impacted by asset impairment losses of RMB 11 93 billion, including RMB 7 27 billion from Jining Power Plant, and RMB 3 39 billion in losses from typhoon and hail damage to fixed assets and construction in progress [1] - Excluding impairment effects, the profit per kWh for coal-fired power increased by RMB 0 0045 YoY to RMB 0 031 per kWh [1] - New energy installed capacity grew by 5 22 GW, driving a 1 14% YoY increase in electricity generation, with wind power generation up 16 12% YoY and photovoltaic power generation up 72 92% YoY [1] Financial Performance - For Q3 2024, the coal-fired power segment achieved a pre-tax profit of RMB 25 88 billion, with a profit per kWh of RMB 0 024, down RMB 0 0023 YoY [1] - The gas-fired power, wind power, photovoltaic, and hydropower segments achieved total profits of RMB 8 56 billion, RMB 52 00 billion, RMB 24 30 billion, and RMB 1 19 billion, respectively, with YoY growth rates of 21 91%, 10 87%, 33 21%, and 277 81% [1] - The company added 3 75 GW of photovoltaic and 1 47 GW of wind power capacity in 2024, totaling 5 22 GW of new installed capacity [1] Profit Forecast and Valuation - The report revised down the company's profit forecast, expecting net profit attributable to shareholders of RMB 115 67 billion, RMB 125 91 billion, and RMB 145 50 billion for 2024-2026, compared to previous estimates of RMB 129 99 billion, RMB 143 90 billion, and RMB 163 24 billion [1] - The current stock price implies a PE ratio of 9 8x, 9 0x, and 7 8x for 2024-2026, respectively [1] - Compared to peers like Huadian Power International, GD Power Development, and Datang International Power Generation, Huadian International's valuation is considered reasonable [1] Financial Ratios - The company's gross margin is expected to improve from 12 12% in 2023 to 15 30% in 2026 [6] - ROE is projected to increase from 5 30% in 2023 to 8 13% in 2026 [6] - The debt-to-asset ratio is expected to decline from 68 33% in 2023 to 64 70% in 2026 [6]