HEGC(SZ:000883) HTSC·2024-12-15 04:10Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 7.04 [1][4]. Core Views - The company has demonstrated resilience in its power generation capacity, with a stable year-on-year growth rate in cumulative power generation despite a significant decrease in water inflow since August [1]. - The company is currently one of the few power companies in the A-share market with a price-to-book (PB) ratio below 1x, indicating a favorable valuation [1]. - The anticipated growth in the company's performance for 2025 is expected to be driven by lower coal prices and the commissioning of new coal power units, as well as the addition of new renewable energy installations [3][4]. Summary by Sections Investment Rating - The report maintains a "Buy" rating for the company with a target price set at RMB 7.04 [1][4]. Performance Outlook - The company has experienced a significant decline in water power generation since August, leading to a downward adjustment in the 2024 water power generation forecast by 19.7% to 10.852 billion kWh [2]. - Conversely, the company has seen a substantial increase in coal power generation, with a year-on-year growth of 32.2% in the first eleven months of 2024, prompting an upward adjustment in the coal power generation forecast by 7.6% to 25.705 billion kWh [2]. Future Growth Drivers - The company is expected to benefit from improved wind conditions, with a year-on-year increase of 13.6% in wind power generation from January to November 2024 [3]. - The company is in the process of expanding its coal power capacity with the construction of new units, expected to be operational in 2025 and 2026 [3]. - The company plans to add 2 GW of new renewable energy capacity, primarily in solar power, in 2024 and 2025 [3]. Financial Projections - The report projects the company's net profit attributable to shareholders to increase to RMB 2.65 billion in 2024, RMB 2.89 billion in 2025, and RMB 3.07 billion in 2026 [6]. - The company's earnings per share (EPS) is expected to rise from RMB 0.41 in 2024 to RMB 0.47 in 2026 [6]. - The report also notes a decrease in the average coal price, which is expected to enhance the profitability of the company's coal power segment in 2025 [3][4].