Operating income increased slightly, and net profit to mother increased significantly. With 2024H1, the company achieved operating income of 58.31 billion yuan (+0.19%), net profit attributable to mother of 3.108 billion yuan (+104.85%), and net profit not attributable to mother of 3.119 billion yuan (+145.43%). Among them, second-quarter revenue was 27.573 billion yuan (-8.65%), net profit attributable to mother was 1.777 billion yuan (+28.71%), and net profit not attributable to mother was 1.792 billion yuan (+46.50%). The slight rise in the company's revenue was affected by a combination of power generation, increased feed-in electricity, and falling electricity prices. 2024H1, the company's feed-in electricity usage was 122.397 billion kilowatt-hours (+4.43%), while the average online settlement price was 462.74 yuan/megawatt-hour (tax included), a year-on-year decrease of 4.70%. The reason for the increase in the company's net profit due to the year-on-year decline in coal prices has led to a decrease in fuel costs, and at the same time, the good water supply situation has driven a sharp increase in profits in the hydropower sector.

The total profit of the coal power and hydropower sector increased sharply, while the total profit of the wind power sector declined year on year. Looking at total profit by sector, the company's total profit in the first half of 2024 was 1.51 billion yuan (+288.13%), the combustion engine sector 0.345 billion yuan (+59.04%), the hydropower sector 1.032 billion yuan (+1033.02%), the wind power sector 1.131 billion yuan (-23.06%), and the photovoltaic sector 0.39 billion yuan (+14.30%).

The company has sufficient resources for projects under construction and approval, and future performance is expected to continue to grow. The company seizes transformation and development opportunities, vigorously develops strategic emerging industries with new energy as the main body, accelerates the acquisition of resources for large-scale high-quality new energy projects, promotes the iterative development of next-generation coal and power projects by selecting advantages and steps, and accelerates the transformation and upgrading of the company's traditional industries. In the first half of 2024, the company approved 122 power projects, with an approved capacity of 4.715 million kilowatts, of which 1.1093 million kilowatts of wind power projects and 3.6057 million kilowatts of photovoltaic projects; 80 power projects under construction, with a capacity of 11.8692 million kilowatts, of which thermal power projects have a capacity of 5.7461 million kilowatts, wind power projects with an ongoing construction capacity of 3.4577 million kilowatts, and photovoltaic projects under construction 2.6654 million kW. In the future, the company's ongoing construction and reserve projects will gradually be put into operation, and performance is expected to continue to grow.

Risk warning: Electricity volume is declining; electricity prices are falling; coal prices are rising; project operation falls short of expectations.

Investment advice: The company's net profit for 2024-2026 is expected to be 5.03/5.62/6.18 billion yuan, respectively, up 268.1%/11.9%/9.9% year-on-year; EPS is 0.27, 0.30, and 0.33 yuan, respectively, and the PE corresponding to the current stock price is 10.0/8.9/8.1X. The company was given 11-12xPE in 2024. The company's reasonable market value is 55.3-60.3 billion yuan, corresponding to a reasonable value of 2.99-3.26 yuan/share. There is room for a 10%-20% premium compared to the current stock price, maintaining a “superior to the market” rating.