新电站投产在即，长期增长潜力充足

Investment Rating - The report maintains a "Buy - A" investment rating for Huaneng Hydropower, with a target price of 10.78 CNY for the next six months [5]. Core Views - The company is expected to experience long-term growth potential due to the imminent commissioning of new power stations and a favorable pricing environment for electricity [2][3]. - Despite challenges such as reduced water inflow affecting power generation, the company has managed to maintain stable growth through increased electricity prices and optimized financial costs [2][3]. - The company has a robust cash flow and plans to distribute at least 50% of its distributable profits as dividends over the next three years [8]. Summary by Sections Financial Performance - In 2023, Huaneng Hydropower achieved a revenue of 23.4613 billion CNY, a slight decrease of 0.51% year-on-year, while net profit increased by 5.58% to 7.6381 billion CNY [1]. - For Q1 2024, the company reported a revenue of 4.42 billion CNY, up 3.58% year-on-year, and a net profit of 1.065 billion CNY, reflecting a 17.25% increase [1]. Capacity and Production - As of the end of 2023, the company had a total installed capacity of 27.53 GW, with hydropower accounting for 25.6 GW and renewable energy for 1.93 GW [2]. - The company is set to commission two major hydropower stations during the 14th Five-Year Plan, which will increase its hydropower capacity by 9.2% [3]. Cost Structure and Profitability - The company's average electricity price increased by 4.24% to 218.85 CNY/MWh in 2023, contributing to its profitability despite lower power generation due to water scarcity [2]. - The company's gross margin improved to 56.36% in 2023, up 0.65 percentage points year-on-year, with expectations for further enhancement as depreciation costs decline [8]. Future Projections - Revenue projections for 2024 to 2026 are 26.5623 billion CNY, 29.2991 billion CNY, and 31.3229 billion CNY, with respective growth rates of 13.2%, 10.3%, and 6.9% [9]. - Net profit forecasts for the same period are 8.7591 billion CNY, 9.9886 billion CNY, and 10.6922 billion CNY, with growth rates of 14.7%, 14.0%, and 7% [9].