SDIC Power(SH:600886) HTSC·2025-09-01 07:56Investment Rating - The investment rating for the company is maintained as "Buy" [2][12]. Core Views - The company achieved a revenue of RMB 25.697 billion in 1H25, a year-on-year decrease of 5.18%, while the net profit attributable to the parent company was RMB 3.795 billion, an increase of 1.36% year-on-year [8]. - The report highlights the integrated development of the Yalong River hydropower and wind power, maintaining a positive outlook [8][12]. - The target price for the company is set at RMB 16.67, reflecting a potential upside from the current market price [3][12]. Financial Performance Summary - For 1H25, the company's coal-fired power generation volume decreased by 21.5% year-on-year to 20.702 billion kWh, primarily due to increased clean energy generation in the region [9]. - The net profit per kWh for coal-fired power remained stable at 4 cents, despite significant price declines in some regions [9]. - The Yalong River hydropower's net profit contribution increased by 11.6% year-on-year to RMB 2.556 billion, driven by a 12.7% increase in power generation [10]. - The company’s new energy projects saw a decline in net profit by 18.5% year-on-year, attributed to lower grid prices during marketization [11]. Earnings Forecast and Valuation - Revenue projections for the company are as follows: RMB 57.819 billion in 2024, RMB 53.975 billion in 2025E, RMB 56.863 billion in 2026E, and RMB 59.643 billion in 2027E, with a forecasted decline of 6.65% in 2025E [7]. - The net profit attributable to the parent company is expected to be RMB 6.643 billion in 2024, RMB 7.244 billion in 2025E, RMB 7.527 billion in 2026E, and RMB 7.831 billion in 2027E, with a growth of 9.05% in 2025E [7]. - The report provides a target market capitalization of RMB 133.5 billion based on the company's projected price-to-book (PB) and price-to-earnings (PE) ratios [12].