Shenergy(SH:600642) SINOLINK SECURITIES·2025-05-20 00:35Investment Rating - The report assigns a "Buy" rating for the company with a target price of 10.03 RMB based on a 12x PE for 2025 [4]. Core Insights - The company is positioned to benefit from a downward trend in coal prices, which enhances the profit elasticity of its thermal power assets due to its regional advantages in Shanghai's electricity supply and demand dynamics [2][3]. - The company plans to add 8 to 10 million kilowatts of new energy capacity during the 14th Five-Year Plan period, with a focus on offshore wind projects, which are crucial for achieving carbon neutrality in Shanghai [3]. - The company has a stable revenue stream from its natural gas pipeline and gas power assets, supported by a favorable pricing mechanism [3]. Summary by Sections 1. Company Overview - The company is a comprehensive energy platform controlled by the Shanghai State-owned Assets Supervision and Administration Commission, with a high dividend payout ratio of nearly 50% since its listing [9][18]. 2. Power Business: Profit Elasticity and Growth in New Energy 2.1 Thermal Power: Profit Elasticity Enhanced by Coal Price Downturn - The regional supply-demand balance in Shanghai is expected to remain tight until 2026, supporting the company's thermal power profitability [2]. - The company has maintained high coal machine utilization hours, projected to remain above 4,800 hours in the next two years [2]. - The competitive landscape in Shanghai is characterized by high industry concentration, with the company and its major competitors holding over 80% of the market share [2]. 2.2 New Energy: Active Layout for Energy Transition - The company aims to accelerate the development of new energy projects, with 3.95 million kilowatts of new energy projects expected to be operational between 2025 and 2026 [3]. - Offshore wind energy is identified as a key pathway for achieving carbon neutrality in Shanghai, with significant future development potential [3]. 3. Stability: Stable Profitability from Pricing Mechanisms - The company operates the only high-pressure natural gas pipeline system in Shanghai, ensuring stable profitability from gas supply [3]. - The company has diversified its investments into nuclear power and pumped storage, contributing approximately 700 million RMB in annual investment income [3]. 4. Profit Forecast and Investment Recommendations - The company is projected to achieve revenues of 29.85 billion RMB in 2025, with a net profit of 4.09 billion RMB, corresponding to an EPS of 0.84 RMB [4]. - The report emphasizes the company's strong dividend capability and willingness, with a current dividend yield of approximately 5.0%, ranking among the top in the thermal power industry [3][31].