Introduction to this report:

The company's stable dividend attribute is prominent. We believe that the current expected dividend rate does not fully reflect the company's dividend value.

Key points of investment:

Maintain the “Overweight” rating: Maintain the 2023-2025 EPS of 1.12/1.43/1.51 yuan. Maintain the target price of $28.60 and maintain the “Overweight” rating.

Investors are demanding lower returns, and the value of the company's dividends has yet to be fully realized. The market believes that the dividend rate of the company corresponding to the current stock price is not very attractive; we believe that the steady increase in the company's total cash dividend is invaluable. Against the backdrop of investors demanding a decline in return, the company's stable dividend value is expected to increase.

Unique information and logic: 1) The company's main hydropower business operates steadily (the average value of incoming water in the Yangtze River Basin returns for many years), and with sufficient cash flow support, the company has the ability to further iron out the impact of short-term incoming water fluctuations by increasing the dividend ratio in years when the incoming water supply is poor, and has strong stable dividend attributes; 2) the market's DPS expectations for the company are relatively stable. Referring to the Gordon model, we believe that the company's stock price is mainly driven by changes in the return rate r (“required dividend ratio”) on the denominator side; 3) “Investors to the company The “required dividend rate” can be It consists of a risk-free interest rate and a risk compensation requirement. Currently, risk-free interest rates are still in a downward channel, and investors' “risk compensation requirements” are also expected to decline in the future (market expectations for the stability of the company's dividend amount increase, market style bias is stable assets with weak correlation with the economic cycle). We believe that investors' “required dividend rate” for the company still has room to decline.

Catalyst: The amount of the company's cash dividends remained stable, and the risk-free interest rate center moved downward.

Risk warning: The Yangtze River Basin is trending downward, risk-free interest rates exceed expectations, and estimates are subjective to a certain extent.