CYPC(600900)2025-04-14 01:32Summary of China Yangtze Power Co. Research Call Company Overview - Company: China Yangtze Power Co. - Industry: Utilities - Market Cap: Rmb645,868.8 million - Stock Rating: Overweight - Price Target: Rmb34.22 - Current Share Price: Rmb28.40 (as of April 3, 2025) - 52-Week Range: Rmb32.28 - Rmb24.39 - Shares Outstanding: 22,742 million [6][6] Key Points Earnings and Cash Flow - The company provides defensive earnings and cash flow supported by six hydropower stations with a total installed capacity of 72GW [2][2] - Earnings growth in the medium term is expected to be driven by: 1. Tariff increases from auxiliary services, green certificates, and higher market volume 2. Financial cost savings 3. Decreased depreciation costs due to the end of generators' depreciation period [2][2] Dividend Policy - The company has committed to a dividend payout ratio of over 70% during the period from 2021 to 2025 [2][2] Probability Estimates - There is an estimated 70% to 80% probability for the positive scenario regarding the company's performance [3][3] Valuation Methodology - The price target is derived from a discounted cash flow (DCF) methodology, assuming stable profit and cash flows from hydropower stations - The weighted average cost of capital (WACC) is set at 6.7%, with no terminal growth assumed [9][9] Risks - Upside Risks: 1. Better-than-expected hydropower resources 2. Higher-than-expected dividend payout ratio 3. Increased hydropower utilization hours 4. Greater renewable energy capacity expansion [10][10] - Downside Risks: 1. Weaker-than-expected hydropower resources 2. Lower-than-expected dividend payout ratio 3. Reduced renewable energy capacity expansion [11][11] Additional Insights - The company is positioned favorably within the utilities sector, with an attractive industry view [6][6] - Analysts express confidence in the company's ability to generate stable cash flows, which supports the positive outlook for its stock price [9][9] This summary encapsulates the essential insights from the research call regarding China Yangtze Power Co., highlighting its financial stability, growth prospects, and associated risks.