CYPC(SH:600900)2025-06-16 03:16Investment Rating - The investment rating for China Yangtze Power Co. is Overweight [4][81]. Core Views - The report indicates an attractive industry view, supported by improved water resources and a sustainable high payout ratio of over 70% from 2021 to 2025 [14][4]. - The price target has been revised to Rmb34.79, reflecting a 1.7% increase due to earnings revisions [3][8]. - The net profit estimates for 2025 and 2026 have been increased by 3.3% and 2.6%, respectively, with a new forecast for 2027 net profit at Rmb40.5 billion [2]. Summary by Sections Price Target and Scenarios - The price target is set at Rmb34.79, with a bull case of Rmb42.53 and a bear case of Rmb24.99 [8][11]. - The bull case assumes a 5% increase in utilization hours and a 1 percentage point higher tariff growth from 2025 [12]. - The bear case assumes a 5% decrease in utilization hours and a 3 percentage point lower tariff growth from 2025 [17]. Financial Estimates - The expected EPS for fiscal years ending in December are projected as follows: 1.33 for 2024, 1.52 for 2025, 1.61 for 2026, and 1.66 for 2027 [4]. - Revenue from electricity generation is forecasted to be Rmb74.48 billion in 2024, Rmb79.46 billion in 2025, Rmb81.31 billion in 2026, and Rmb82.30 billion in 2027 [19]. Investment Drivers - Key investment drivers include the recovery of hydro resources, synergy in power generation among hydro stations, and rising utilization of newly acquired units [14]. - The report emphasizes the company's ability to generate stable profits and cash flows from its hydropower stations, supported by a WACC of 6.7% [8].