The improvement in incoming water led to a sharp increase in net profit to mother. In the first half of 2024, the company achieved operating income of 5.215 billion yuan, a year-on-year decrease of 8.33%, mainly due to a reduction in the scale of trade business and a decline in revenue; net profit of 0.229 billion yuan, an increase of 631.74% year on year; net profit not to mother of 0.21 billion yuan, an increase of 4884.38% year on year, mainly due to the company's incoming water preferences, a decrease in outsourced electricity prices, and a year-on-year increase in electricity business profits.
Hydropower generation and feed-in electricity have improved, electricity sales have declined slightly, and the unit price of electricity sold has increased slightly. The company's total hydropower installed capacity was 0.7462 million kilowatts, with a cumulative power generation capacity of 1.271 billion kilowatt-hours in the first half of the year, up 48.55% year on year; the cumulative feed-in electricity volume was 1.257 billion kilowatt-hours, up 48.64% year on year; the company's electricity sales volume was 6.626 billion kilowatt-hours, down 1.47% year on year; the average electricity sales price was 0.491 yuan/kilowatt-hour (excluding tax), up 0.61% from 0.488 yuan/kilowatt-hour in the same period last year.
Hydropower performance has increased dramatically, comprehensive energy has developed rapidly, and the scale of the manganese industry's business has shrunk. In the first half of 2024, the company achieved operating profit of 0.281 billion yuan, mainly including: power business profit of 0.31 billion yuan, comprehensive energy 0.051 billion yuan, manganese industry and trade business -0.064 billion yuan, other income 0.044 billion yuan, investment income 0.037 billion yuan, credit impairment loss -0.071 billion yuan, and fair value change of -0.018 billion yuan. The company's hydropower performance led to a sharp increase in net profit to mother; the scale of the comprehensive energy business grew rapidly, with business profit growing at a year-on-year rate of 36.3%, mainly due to the gradual release of profitability of integrated energy projects such as energy storage power plants and the integration of electric heavy truck charging and storage, and the continuous production and profit of the Jiulongyuan cogeneration project in the Wanzhou Economic Development Zone; the scale of trade business declined, and the manganese industry's capacity utilization rate declined, leading to losses in the manganese industry business.
Risk warning: Electricity prices have dropped sharply, incoming water has fallen short of expectations, electricity purchase costs have increased dramatically, and the progress of the comprehensive energy business has fallen short of expectations.
Investment advice: Lower profit forecasts and maintain the “better than the market” rating. The profit forecast is adjusted to take into account the combined impact of factors such as the increase in incoming water conversion, the increase in profits in the electricity business, and the decline in profits in the manganese industry. The net profit forecast is expected to be 0.689/0.845/0.968 billion yuan in 2024-2026 (originally 0.895/1.152 billion yuan in 2024-2025, with an additional 2026 forecast), with a year-on-year growth rate of 33.7%/22.5%/14.6%; earnings per share of 0.36/0.44/0.51 yuan, corresponding to the company's current stock price of 19 /16/14 times PE, maintaining the “better than the market” rating.