SDIC Power(SH:600886)2024-05-15 12:02Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook based on multiple factors including coal prices, electricity demand growth, and rapid growth in the renewable energy market [5][7][8]. Core Viewpoints - The company is positioned to benefit from a dual increase in both volume and price in its hydropower segment, alongside a recovery in its thermal power assets and continued rapid growth in its renewable energy business [5][7]. - The company’s hydropower capacity is expected to reach 21.28 million kilowatts, with hydropower accounting for 52.08% of total installed capacity in 2023. The renewable energy segment saw a year-on-year increase of 52.84% in installed capacity, reaching 7.04 million kilowatts [4][7]. - The report forecasts net profits for 2024-2026 to be 8.038 billion, 8.759 billion, and 9.323 billion yuan respectively, with corresponding earnings per share (EPS) of 1.08, 1.18, and 1.25 yuan [5][7]. Summary by Sections 1. Company Overview - The company is a comprehensive power operator under the State Investment Group, focusing on hydropower development in the Yalong River basin, which is the only hydropower developer in the region [13][14]. - As of March 31, 2024, the company had a total market capitalization of 111.872 billion yuan and a price-to-book ratio of 2.0 [2]. 2. Hydropower Development - The Yalong River basin has a planned total installed capacity of approximately 30 million kilowatts, with 19.2 million kilowatts already in operation. The company is actively developing the middle and lower reaches of the river [4][30]. - The company’s hydropower projects are expected to enhance overall electricity pricing due to the increasing demand in Southwest China, where hydropower is a critical resource [34][37]. 3. Thermal Power Optimization - The company has improved the quality of its thermal power assets by phasing out smaller, less efficient units, resulting in a higher proportion of large-capacity units [4][7]. - The report indicates that the company’s thermal power segment has turned profitable, with net profits from thermal power reaching 949 million yuan in 2023 [4][7]. 4. Renewable Energy Growth - The company has seen a compound annual growth rate (CAGR) of 34.83% in its renewable energy capacity from 2018 to 2023, with the share of renewable energy in total capacity rising to 17.22% [4][21]. - The company plans to reach a total renewable energy capacity of 17 million kilowatts by the end of the 14th Five-Year Plan, with significant growth expected in both wind and solar projects [4][7]. 5. Financial Performance - The company reported a revenue of 56.712 billion yuan in 2023, a year-on-year increase of 12.32%, with a net profit of 6.705 billion yuan, reflecting a 64.31% increase [4][6]. - The company has maintained a stable cash flow, with operating cash flow reaching 21.268 billion yuan in 2023, supporting its expansion and dividend payments [21][26].