CYPC(SH:600900) Zhongyuan Securities·2024-05-09 13:00Investment 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][24]. 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, contributing to a more robust operational framework [8]. - The company is optimistic about future water conditions and expects improved profitability from its hydropower stations in 2024-2026 [14]. Financial Performance Summary - In 2023, the company reported operating revenue of 781.12 billion yuan, a year-on-year increase of 13.43%, and a net profit attributable to shareholders of 272.39 billion yuan, up 14.81% [7]. - 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 156.41 billion yuan, a 1.58% increase year-on-year, and a net profit of 39.67 billion yuan, up 9.80% [9]. Operational Highlights - The company’s hydropower capacity reached 71.795 million kilowatts after the acquisition of Yun Chuan, representing approximately 17% of the national operational hydropower capacity [8]. - Despite facing challenges from reduced water levels, the company managed to increase its total power generation by 5.34% in 2023 [8]. - The average on-grid electricity price for the company in 2023 was 281.28 yuan per megawatt-hour, an increase of 11.56 yuan compared to 2022 [10]. Future Outlook - The company anticipates a total power generation of 3,074 billion kilowatt-hours in 2024, contingent on favorable water conditions [10]. - Projections for net profit attributable to shareholders are optimistic, with estimates of 329.53 billion yuan, 355.19 billion yuan, and 373.34 billion yuan for 2024, 2025, and 2026 respectively [14]. - The company is actively expanding its renewable energy initiatives, including pumped storage and smart energy projects, to enhance its operational efficiency and market position [12].