CSICPCL(SH:600482) Changjiang Securities·2024-11-12 03:32Investment Rating - The report maintains a "Buy" rating for China Power [8][9]. Core Views - The acquisition of a 16.51% stake in China Ship Diesel Engine by China Power is expected to accelerate the development of its diesel engine business, increasing its total ownership to 68.37% [4][5]. - The acquisition aligns with national policies supporting mergers and acquisitions, enhancing decision-making efficiency and competitive strength in the diesel engine sector [6]. - The shipbuilding industry is experiencing a new boom, with rising demand for marine diesel engines, which is expected to further improve profitability for China Power [7]. Summary by Sections Event Description - On November 8, 2024, China Power announced plans to acquire a 16.51% stake in China Ship Diesel Engine through convertible bonds and cash payments [4]. Event Commentary - Post-acquisition, China Power will hold 68.37% of China Ship Diesel Engine, enhancing its control and operational efficiency [5]. Industry Outlook - The marine diesel engine sector is benefiting from a favorable market cycle, with significant revenue and profit growth reported by China Ship Diesel Engine [7]. - The demand for dual-fuel engines is increasing, driven by carbon reduction policies and rising ship prices, which is expected to enhance China Power's profitability [7]. Financial Projections - China Power is projected to achieve a net profit of CNY 1.228 billion in 2024 and CNY 2.203 billion in 2025, with corresponding P/E ratios of 43x and 24x [8].