长源电力：装机成长期，看好公司利润增长

Investment Rating - The report maintains an "Overweight" rating for the company with a target price of RMB 5.26 [1] Core Views - The company's new coal and photovoltaic power installations supported a rapid year-on-year growth in cumulative power generation from January to November 2024 [1] - The company completed a private placement on December 3, increasing its total share capital by 26.6% to 3.481 billion shares, diluting EPS by 21% for the first nine months of 2024 [1][3] - The dilution impact is expected to gradually weaken as the new energy projects funded by the placement come into operation [1][3] - The company's coal power and photovoltaic installations are expected to continue growing in 2025-2026 [1] Power Generation - The company put into operation 4 coal power units in 2023, with a total capacity of 2.02 million kW [2] - From January to November 2024, the company's coal power generation increased by 24.9% year-on-year to 32.107 billion kWh, driven by increased coal power capacity and reduced hydropower output in Hubei Province [2] - Wind power generation decreased by 11.8% year-on-year to 451 million kWh, while photovoltaic power generation surged by 81.9% to 2.189 billion kWh due to new grid-connected photovoltaic installations [2] Financial Performance and Valuation - The company raised approximately RMB 3 billion through a private placement, with the controlling shareholder, China Energy Group, subscribing to RMB 900 million [3] - The report forecasts the company's net profit attributable to the parent company to increase by 0%, 9.2%, and 11.1% in 2024-2026, reaching RMB 982 million, RMB 1.291 billion, and RMB 1.671 billion, respectively [4] - The target price of RMB 5.26 is based on a 2025E PB of 1.55x, considering the company's strong coal supply agreements and excellent profitability in Hubei Province's coal power sector [4] Financial Projections - Revenue is expected to grow by 20.15%, 8.41%, and 10.91% in 2024-2026, reaching RMB 17.37 billion, RMB 18.831 billion, and RMB 20.886 billion, respectively [6] - EPS is projected to be RMB 0.28, RMB 0.37, and RMB 0.48 in 2024-2026, with ROE increasing from 9.04% in 2024 to 12.71% in 2026 [6] - The company's PE ratio is expected to decrease from 17.48x in 2024 to 10.27x in 2026, reflecting improved profitability [6]