JEI(000600) Soochow Securities·2025-06-11 00:23Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for investment opportunities [1]. Core Insights - The company benefits from a tight electricity supply-demand balance in Hebei Province, characterized as a "nuclear-poor" area, which is expected to sustain over the next three years [8][10]. - The report highlights the significant efficiency improvements from the combined heat and power (CHP) model, achieving thermal efficiency rates of 80%-90% [39]. - The company is positioned favorably due to its proximity to major coal-producing provinces, which enhances its cost structure amid declining coal prices [37]. Summary by Sections 1. Supply and Demand Dynamics - In 2024, the conventional power sources in Hebei Province are projected to consist of 63% thermal, 2% hydro, and 0% nuclear, significantly lower than the national averages of 67%, 14%, and 5% respectively [10][15]. - The report anticipates a sustained tight supply of conventional power in Hebei, with thermal power growth slightly exceeding the national average [20][26]. - The demand for electricity is expected to increase due to the "East Data West Computing" initiative, which is projected to release additional demand [27][28]. 2. Pricing and Revenue Projections - The average on-grid electricity price for 2024 is estimated at 438.22 RMB/MWh, reflecting a decrease of 12.57 RMB/MWh year-on-year [32]. - The report forecasts that the company's net profit attributable to shareholders will reach 1.34 billion RMB in 2025, with a year-on-year growth rate of 152.2% [1][10]. 3. Operational Efficiency - The company operates 14 thermal power plants, achieving a total generation of 538.90 billion kWh in 2024, an increase of 116.24 billion kWh from the previous year [32][33]. - The implementation of a stock incentive plan aims for significant growth in operating profit over the next three years, with targets set at 300 million RMB, 520 million RMB, and 630 million RMB for 2024, 2025, and 2026 respectively [10][39]. 4. Market Position and Competitive Advantage - The company is the largest thermal power operator in Hebei, with a total installed capacity of 1,177 MW as of 2025 [39]. - The strategic location near coal-rich provinces allows the company to optimize fuel procurement and manage costs effectively [37][39].