CHINA POWER(HK:02380) GF SECURITIES·2024-05-22 05:32Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 3.96 HKD per share based on a 10x PE ratio for 2024 [4][12]. Core Insights - The company has seen a significant improvement in its shareholder structure, with CITIC Financial Assets increasing its stake to 5% and the major shareholder, State Power Investment Corporation, holding 63.7% as of the end of 2023 [2]. - The company is the largest power platform under State Power Investment, with a total installed capacity of 45 GW (equity capacity of 38 GW) as of the end of 2023, of which clean energy accounts for 34 GW, representing 75.4% of the total [2]. - The company reported a main revenue of 44.3 billion RMB and a net profit attributable to shareholders of 3.08 billion RMB in 2023, reflecting a year-on-year increase of 16.5% [2]. - The net profit from wind and solar energy reached 4.6 billion RMB in 2023, a significant increase of 69.7% year-on-year [2]. - The company is transitioning from coal-fired power to clean energy, with plans to add 4.5 GW of wind and 2.5 GW of solar capacity in 2024, which will increase the clean energy proportion to over 78% [2]. - The hydropower segment is expected to recover significantly in 2024, with a projected 79.6% year-on-year increase in electricity sales in the first four months [2]. Financial Summary - The company’s projected net profits for 2024, 2025, and 2026 are 4.49 billion RMB, 5.68 billion RMB, and 7.02 billion RMB, respectively, with corresponding PE ratios of 8.91, 7.05, and 5.71 [3][9]. - The expected revenue growth rates for the years 2024 to 2026 are 30.4%, 16.1%, and 14.8%, respectively [3][10]. - The company’s EBITDA is projected to grow from 18.47 billion RMB in 2023 to 29.33 billion RMB by 2026 [3][9]. - The return on equity (ROE) is expected to improve from 5.8% in 2023 to 11.3% by 2026 [3][10].