SEP(SH:600021) Hua Yuan Zheng Quan·2024-05-19 23:30Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [4][9]. Core Viewpoints - The company is positioned as a core power platform under the State Power Investment Corporation, focusing on a steady transition to clean energy. It has a total installed capacity of 22.49 million kilowatts, with a clean energy share of 56% as of March 2024 [4][17]. - The company has achieved a historical high in net profit attributable to shareholders, reaching approximately 1.5 billion yuan in 2023, benefiting from a decline in coal prices and stable growth in green energy [4][22]. - The company plans to increase its clean energy capacity to 60% by 2025, with a reasonable and steady development strategy in place [4][9]. Summary by Sections 1. Core Platform and Clean Transition - The company is the largest power listed platform under the State Power Investment Corporation, with a focus on the Yangtze River Delta region and a strategy for overseas expansion [15][19]. - As of the end of 2023, the company has a total installed capacity of 22.49 million kilowatts, including 9.85 million kilowatts of coal power, 3.62 million kilowatts of gas power, 3.87 million kilowatts of wind power, and 5.16 million kilowatts of solar power [17][19]. 2. Coal Power Growth in the Yangtze River Delta - The company has a coal power capacity of 9.85 million kilowatts, with a focus on the Yangtze River Delta, benefiting from high electricity price resilience and coal price elasticity [28][29]. - The company is constructing six new coal power units, which are expected to significantly improve profitability upon completion [4][34]. 3. Steady Development of Renewable Energy - The company has a clear strategy to deepen its presence in Shanghai and surrounding areas while expanding overseas, aiming to build a large-scale clean energy base in the west [4][17]. - As of the end of 2023, the company has 3.87 million kilowatts of wind power and 5.11 million kilowatts of solar power, with plans to increase the clean energy share to 60% by 2025 [4][9]. 4. Profit Forecast and Valuation - The company is expected to achieve net profits of 2.5 billion, 2.9 billion, and 3.4 billion yuan for 2024, 2025, and 2026, respectively, with a current price-to-earnings ratio of 12, 10, and 9 for the same years [5][9]. - The intrinsic value of the company is estimated at 32.7 billion yuan, indicating a 24% upside potential from the current market value [5][9].