Core Viewpoint - The article discusses the significant investment and potential of China Electric Power Construction (China Electric) in the newly established China Yajiang Group and its ambitious 1.2 trillion yuan hydropower project, highlighting the company's unique capabilities and the expected financial benefits from this project [5][10][20]. Group 1: Project Overview - China Yajiang Group was established on July 19, 2025, with a plan to invest 1.2 trillion yuan in a super hydropower project [5]. - The project, known as the Yajiang Downstream Hydropower Project, is unprecedented in scale and complexity, requiring extensive preliminary work and innovative technical solutions [10][12]. - China Electric is positioned as a key player in the project, having already contributed significantly to its planning and design phases [11][12]. Group 2: Financial Implications - The expected direct revenue for China Electric from the Yajiang project includes approximately 300 billion yuan from research and design fees, with 80% of the workload anticipated to be handled by the company [20]. - Construction costs are estimated to be around 7 trillion yuan, with China Electric expected to secure contracts worth about 5 trillion yuan, yielding a gross profit of no less than 500 billion yuan [21]. - Additionally, China Electric holds a 22% stake in Yajiang Group, which could generate over 7 billion yuan in annual dividends, equating to a valuation of over 200 billion yuan based on similar companies [23]. Group 3: Market Position and Contracts - As of the end of 2024, China Electric's total contract value reached 2.13 trillion yuan, with ongoing projects valued at 3.89 trillion yuan [32]. - The company has shown a strong ability to manage contract assets, with contract assets exceeding contract liabilities for the first time in 2023, indicating robust operational capacity [35][36]. - The article suggests that despite the speculative nature of the stock market, long-term investors in China Electric are likely to see positive outcomes due to the company's solid fundamentals and growth prospects [36].

Core Viewpoint - The article discusses the recent establishment of China Yajiang Group and its ambitious investment of 1.2 trillion yuan in a super hydropower project, highlighting the subsequent market reactions and the performance of related stocks, particularly China Electric Power Construction (China Electric) and Deep Water Survey Institute (Deep Water) [1][2]. Group 1: Project Overview - China Yajiang Group was founded on July 19, 2025, with a significant investment of 1.2 trillion yuan for the construction of the Yajiang downstream hydropower project [1]. - The project is expected to create 3,000 to 5,000 new jobs, with a management center located in Linzhi City [3]. - China Electric is involved as a research, testing, and construction unit for the Yajiang project, indicating its critical role in the project's development [4][9]. Group 2: Market Reactions - Following the announcement, China Electric's stock fell by 16.8% from its peak, while Deep Water's stock saw a 10.6% decline, despite a prior increase of 96% [2]. - The article suggests that treating China Electric as merely a speculative stock is misguided, emphasizing its established capabilities in large-scale hydropower projects [3][12]. Group 3: Financial Implications - The total investment of 1.2 trillion yuan presents a significant challenge, even for a company known for its infrastructure projects [7]. - China Electric is expected to earn approximately 300 billion yuan from design fees, with 80% of the workload falling on them [20]. - The construction segment is projected to account for 65% of the total investment, with China Electric potentially securing contracts worth around 500 billion yuan, yielding a gross profit of no less than 50 billion yuan [21]. Group 4: Strategic Advantages - China Electric holds a 22% stake in Yajiang Group, which could yield over 7 billion yuan in annual dividends, given the project's expected profitability [23]. - The company has extensive experience from the Yalong River hydropower project, which will be leveraged in the Yajiang project, providing valuable insights and methodologies [15][16]. - The article posits that the upcoming listing of China Electric's power investment segment could lead to a market valuation of around 100 billion yuan, based on comparisons with similar companies [30].