CYPC(SH:600900) Zhongyuan Securities·2024-05-09 11:30Investment Rating - The report maintains an "Increase" investment rating for the company, indicating a projected relative increase of 5% to 15% compared to the CSI 300 index over the next six months [2][25]. Core Views - The company has shown resilience in its financial performance despite adverse water conditions, achieving a 14.81% year-on-year increase in net profit for 2023 [7][8]. - The acquisition of Yun Chuan Company has enhanced the company's hydropower capacity, now totaling 71.795 million kilowatts, representing approximately 17% of the national operational hydropower capacity [8]. - The company is optimistic about future water conditions and expects improved profitability from the newly integrated hydropower stations [14]. Financial Performance Summary - In 2023, the company reported operating revenue of 78.112 billion yuan, a year-on-year increase of 13.43%, and a net profit attributable to shareholders of 27.239 billion yuan, up 14.81% [7][8]. - The fourth quarter of 2023 saw a significant revenue increase of 28.23% year-on-year, with net profit soaring by 86.98% [7]. - For the first quarter of 2024, the company achieved operating revenue of 15.641 billion yuan, a slight increase of 1.58%, and a net profit of 3.967 billion yuan, up 9.80% year-on-year [7][9]. Operational Highlights - The company has successfully transitioned to a new operational model with the integration of six hydropower stations, which has led to an increase in electricity generation despite challenging water conditions [8]. - The average on-grid electricity price for the company in 2023 was 281.28 yuan per megawatt-hour, reflecting an increase of 11.56 yuan per megawatt-hour from 2022 [10]. - The company has made significant strides in diversifying its energy portfolio, including investments in pumped storage, smart energy solutions, and international projects [12]. Future Outlook - The company anticipates a gradual improvement in hydropower generation from 2024 to 2026, with projected net profits of 32.953 billion yuan, 35.519 billion yuan, and 37.334 billion yuan respectively [14]. - The report highlights the potential for increased profitability as the company benefits from the full operational capacity of the newly acquired hydropower stations [14].