Shenergy(SH:600642) Huafu Securities·2024-12-06 00:40Investment Rating - The report assigns a "Hold" rating for the company [3]. Core Views - The company is a comprehensive energy supplier with dual main businesses in electricity and oil & gas, rooted in Shanghai. It has shown resilience in profitability recovery, supported by stable investment returns and a commitment to dividends even during challenging years [3][4][5]. - The company has a strong position in the thermal power sector, being one of the top three thermal power producers in Shanghai, with a significant installed capacity and high utilization rates [4][5][47]. - The company is actively expanding its renewable energy capacity and oil & gas operations, with a notable compound annual growth rate (CAGR) of 51.1% in renewable installations from 2019 to 2023 [5][68]. Summary by Sections 1. Company Overview - The company was established from the former Sheneng Power Development Company and is the first listed company in China's power energy sector. It has diversified into coal, gas, nuclear, and renewable energy projects [15][17]. - As of Q3 2024, the company has a controlling shareholder, Sheneng Group, holding 53.67% of the shares [15][17]. 2. Financial Performance - The company reported a revenue of 226.48 billion yuan from electricity, accounting for 77.72% of total revenue, with oil & gas transportation contributing 28.2 billion yuan, or 9.68% [17]. - The company’s total revenue for 2023 was 254.68 billion yuan, with a gross margin of 19.36% and a net margin of 17.59% for Q1-Q3 2024 [22][33]. 3. Thermal Power Sector - The company operates 8.4 GW of coal power and 3.43 GW of gas power, primarily located in Shanghai, Anhui, and Ningxia. The coal power capacity is 5.03 GW in Shanghai alone [4][49]. - The company’s coal power units have consistently higher utilization hours compared to national averages, benefiting from strong electricity demand in Shanghai [57]. 4. Renewable Energy and Oil & Gas Expansion - The company has increased its renewable energy capacity from 982.6 MW to 5,122 MW from 2019 to 2023, with plans to add 8-10 GW in the next five years [5][68]. - The company is also enhancing its oil and gas operations, focusing on upstream exploration and midstream transportation, which has shown stable profitability [5][68]. 5. Earnings Forecast and Investment Recommendations - The forecast for revenue from 2024 to 2026 is 298.23 billion yuan, 304.90 billion yuan, and 321.75 billion yuan, respectively, with net profits projected at 40.47 billion yuan, 42.82 billion yuan, and 45.98 billion yuan [6][37].