SDIC Power(SH:600886) Hua Yuan Zheng Quan·2024-05-05 10:18Investment Rating - The report maintains a "Buy" rating for the company [4] 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%, and a net profit of 2.035 billion yuan in Q1 2024, a year-on-year increase of 26.14%, exceeding previous expectations [1] - The hydropower segment, particularly from the Yalong River, achieved a net profit of 8.66 billion yuan in 2023, a year-on-year increase of 17.7%, despite a 4.84% decrease in power generation due to low water levels [1] - The thermal power business turned profitable in 2023, with significant contributions to Q1 2024 performance, driven by declining coal prices [1] Summary by Sections Financial Performance - In 2023, the company achieved a net profit of 6.705 billion yuan, with a profit margin of 55% based on net profit [1] - Q1 2024 net profit reached 2.035 billion yuan, surpassing the expected 1.85 billion yuan [1] - The average on-grid electricity price increased by 11.1% in 2023, contributing to revenue growth despite lower hydropower generation [1] Hydropower Segment - The Yalong River hydropower generation decreased by 4.84% in 2023 and 8.21% in Q1 2024 due to continued low water levels [1] - The segment's profitability was supported by rising electricity prices in Sichuan and Jiangsu [1] Thermal Power Segment - The thermal power segment achieved profitability in 2023, with net profits from various plants totaling 13.5 million yuan [1] - The Q1 2024 performance was significantly boosted by the thermal power segment, contributing approximately 7.6 billion yuan to net profit [1] Future Outlook - The report forecasts net profits of 7.542 billion yuan for 2024, 8.503 billion yuan for 2025, and 9.088 billion yuan for 2026, with corresponding PE ratios of 15, 13, and 13 times [2]