SDIC Power(SH:600886) Hua Yuan Zheng Quan·2024-05-05 08:30Investment Rating - The report maintains a "Buy" rating for Guotou Electric Power (600886.SH) [2][3] Core Views - The company reported a net profit attributable to shareholders of 6.705 billion yuan in 2023, a year-on-year increase of 64.31%. In Q1 2024, the net profit reached 2.035 billion yuan, growing by 26.14%, exceeding previous expectations of 1.85 billion yuan [2] - The Yalong River hydropower segment experienced a decrease in generation due to low water levels, with a 4.84% decline in 2023. However, the average on-grid electricity price increased by 11.1%, leading to a net profit of 8.66 billion yuan, up 17.7% year-on-year [2] - The fire power segment turned profitable in 2023, with significant contributions to Q1 2024 performance, driven by declining coal prices [3] Summary by Relevant Sections Financial Performance - In 2023, the total revenue was 56.712 billion yuan, with a year-on-year growth rate of 12.33%. The net profit for 2023 was 6.705 billion yuan, reflecting a growth rate of 64.36% [4][7] - For 2024E, the projected net profit is 7.542 billion yuan, with further increases to 8.503 billion yuan in 2025E and 9.088 billion yuan in 2026E [4][7] Market Dynamics - The tightening supply-demand situation in Sichuan is expected to further drive up electricity prices, benefiting the Yalong River hydropower segment [2] - The report highlights the potential for low-covariance assets, such as hydropower, to outperform in a changing macroeconomic environment, suggesting a favorable outlook for the company [3] Valuation Metrics - The current stock price corresponds to a price-to-earnings (PE) ratio of 15 for 2024, 13 for 2025, and 13 for 2026, indicating long-term investment value in the hydropower sector [3][4]