GGEP(SH:600236) CAITONG SECURITIES·2025-03-14 01:58Investment Rating - The report assigns an "Accumulate" rating for the company for the first time [2] Core Views - The company is a leading hydropower platform under the Datang Group, with a high return on equity (ROE) and a focus on stable cash flow supporting high dividend payouts [7][10] - The company has a significant presence in the Guangxi region, with a total installed capacity of 13.3 million kilowatts, of which hydropower accounts for 10.24 million kilowatts, representing 77% of its total capacity [7][12] - The report anticipates a recovery in profits due to improved water inflow and ongoing projects, projecting revenues of 9.576 billion, 11.220 billion, and 12.083 billion yuan for 2024, 2025, and 2026 respectively [6][49] Summary by Sections Company Overview - The company is the only hydropower operation platform for the Datang Group in the Guangxi Hongshui River basin, with a focus on hydropower generation [10][12] - It has expanded its power asset scale through self-construction and acquisitions since its establishment in 1992 [11][12] Financial Performance - The company reported a revenue of 8.091 billion yuan in 2023, with a projected increase to 9.576 billion yuan in 2024, reflecting an 18.36% growth [6][53] - The net profit attributable to shareholders is expected to rise from 1.226 billion yuan in 2023 to 2.323 billion yuan in 2024, indicating a 89.48% increase [6][53] Profitability and Cash Flow - The average ROE from 2017 to 2023 was 13.70%, positioning the company favorably among its peers [7][39] - The company maintains a high dividend payout ratio, with a commitment to a minimum of 70% for 2024 [7][44] Future Growth Prospects - The company is expected to benefit from improved water inflow conditions, with a projected 27.77% increase in power generation in 2024 [16][17] - Ongoing projects, including the second phase of the Longtan hydropower station, are expected to contribute to future capacity and revenue growth [7][35] Market Position - The company operates primarily in the hydropower sector, with a significant portion of its revenue derived from this segment, averaging 74% from 2019 to the first half of 2024 [21][22] - The company is also expanding its renewable energy portfolio, with plans for significant wind and solar power capacity increases [36][52]