CYPC(SH:600900) 格隆汇APP·2025-11-01 09:37Core Viewpoint - The article discusses the underperformance of Changjiang Electric Power in the context of a bullish A-share market, highlighting the reasons behind its stagnant stock price despite a strong historical performance [2][4][16]. Group 1: Company Performance - Changjiang Electric Power has seen a cumulative increase of approximately 650% from July 2014 to July 2024, with minimal volatility during this period [5]. - The company's revenue grew from 24.2 billion to 84.5 billion yuan, with a compound annual growth rate (CAGR) of about 13%, while net profit increased from 11.5 billion to 32.5 billion yuan, with a CAGR of around 11% [7]. - In the first half of this year, the company reported a 5% increase in revenue and nearly 15% growth in net profit, primarily due to favorable upstream water conditions [10]. Group 2: Market Position and Valuation - The business model of Changjiang Electric Power is considered superior due to its ownership of six large hydropower stations, which are less affected by commodity price fluctuations compared to thermal power [6]. - The valuation of Changjiang Electric Power has increased significantly, from around 10 times earnings in 2014 to nearly 30 times at its peak, reflecting its status as a defensive dividend stock during market downturns [12][14]. - The company has maintained a high dividend payout ratio of over 70%, making it attractive to institutional investors [14]. Group 3: Changing Market Dynamics - Since July 2024, the stock price of Changjiang Electric Power has stagnated, with only a 2% increase despite a broader market rally [16]. - The expectations for continuous earnings growth have weakened, as there are no new power stations to be injected into the company, leading to a potential valuation bubble [18]. - The ongoing market reforms in the electricity sector pose a risk of declining electricity prices, which could impact the company's profitability [19]. Group 4: Shift in Market Style - The market style has shifted from dividend-focused stocks to growth-oriented sectors, driven by macroeconomic policies aimed at stimulating the economy [20][23]. - The recent economic policies have led to a transition in market leadership from defensive sectors like electricity to technology and growth stocks, which may continue in the current bull market [24][30]. - The article suggests that the previous strong performance of dividend stocks may not be sustainable, and investors should consider viewing Changjiang Electric Power as a long-term low-risk investment with stable dividends rather than expecting significant capital appreciation [30].