SDIC Power(SH:600886) GUOTAI HAITONG SECURITIES·2025-11-14 07:03Investment Rating - The investment rating for the company is "Accumulate" with a target price of 16.92 CNY [6]. Core Views - The report highlights that the decline in coal prices has mitigated the pressure from water inflow in the Yalong River, leading to a balanced development of hydropower and wind power [2]. - The company is expected to maintain stable dividends, committing to distribute at least 55% of its distributable profits in cash from 2024 to 2026 [13]. - The report anticipates that the company's earnings per share (EPS) will be 0.87, 0.94, and 1.00 CNY for the years 2025, 2026, and 2027 respectively [13]. Financial Summary - Total revenue for 2023 is projected at 56,712 million CNY, with a year-on-year growth of 12.3%. However, a decline of 8.5% is expected in 2025 [4]. - Net profit attributable to the parent company is forecasted to be 6,705 million CNY in 2023, reflecting a significant increase of 64.3% [4]. - The company’s net asset return rate is expected to be 11.4% in 2023, decreasing to 10.1% by 2025 [4]. Operational Insights - The company’s electricity generation in Q3 2025 was 314 billion kWh from hydropower, 123 billion kWh from thermal power, and 14 billion kWh from wind power, showing a year-on-year decrease of 15% for hydropower and 19% for thermal power [13]. - The operating costs in Q3 2025 were 79 billion CNY, down 22% year-on-year, primarily due to the decline in coal prices [13]. - The financial expenses for the first three quarters of 2025 were -5.3 billion CNY, attributed to lower interest rates and a decrease in accounts receivable [13]. Industry Context - The Yalong River hydropower and wind power base is planned to have an installed capacity of 78 million kW, with hydropower and pumped storage accounting for 39 million kW each [13]. - The report notes that the company is currently developing several renewable energy projects, including the Yangniushan Wind Power and Zhalashan Photovoltaic projects [13].