Huaneng Hydropower(600025) 中国银河·2025-01-22 14:21Investment Rating - The report maintains a "Recommended" rating for Huaneng Hydropower [2][4]. Core Views - The company is expected to achieve a net profit attributable to shareholders of 82.30 to 90.87 billion yuan in 2024, representing a year-on-year increase of 2.75% to 18.97% [4]. - The total power generation for 2024 is projected to be 1120.12 billion kWh, an increase of 4.62% year-on-year, driven by robust hydropower generation and significant growth in renewable energy output [4]. - The commissioning of new units is anticipated to drive growth in power generation in 2025, with the TB hydropower station expected to contribute significantly to the incremental power generation [4]. Financial Forecasts Revenue and Profitability - Revenue is forecasted to grow from 23,461.33 million yuan in 2023 to 24,794.56 million yuan in 2024, reflecting a growth rate of 5.68% [2][6]. - Net profit attributable to shareholders is expected to rise from 7,638.07 million yuan in 2023 to 8,229.92 million yuan in 2024, with a growth rate of 7.75% [2][6]. - The gross margin is projected to remain stable around 56% over the forecast period [2][6]. Key Financial Ratios - The Price-to-Earnings (P/E) ratio is expected to decrease from 20.55 in 2023 to 19.27 in 2024, indicating improved valuation metrics [2][6]. - The Return on Equity (ROE) is forecasted to slightly increase from 11.34% in 2023 to 11.53% in 2024 [2][6]. Cash Flow and Capital Expenditure - Operating cash flow is expected to increase from 17,062.57 million yuan in 2024 to 22,030.11 million yuan in 2026 [5]. - Capital expenditures are projected to remain high, reflecting ongoing investments in new capacity [5]. Power Generation Insights - Hydropower generation is expected to grow by 2.53% to 1,079.29 billion kWh in 2024, supported by favorable water conditions and new unit commissioning [4]. - Renewable energy generation is anticipated to see a substantial increase of 127.09% year-on-year, reaching 40.83 billion kWh in 2024, with significant contributions from solar and wind energy [4]. Market Position and Strategy - The company is well-positioned to benefit from the increasing demand for renewable energy and the commissioning of new hydropower units, which will enhance its competitive edge in the market [4]. - The strategic focus on expanding renewable energy capacity aligns with national energy policies and market trends, providing a solid foundation for future growth [4].