Incident: On August 27, 2024, the company released its 2024 semi-annual report. 24H1 achieved revenue of 0.873 billion yuan, a year-on-year increase of 39.12%, and achieved net profit of 0.133 billion yuan to mother, an increase of 316.76% over the previous year.
Basic earnings per share were 0.3116 yuan, up 316.58% year on year, gross sales margin of 54.36%, up 7.72 pct year on year, net profit margin 25.67%, up 15.54 pct year on year. In the 24Q2 single quarter, the company achieved revenue of 0.612 billion yuan, a year-on-year increase of 50.09%, and achieved net profit to mother of 0.122 billion yuan, an increase of 156.21% over the previous year.
The use of hydropower generation has increased dramatically, power generation capacity has recovered, and integrated feed-in tariffs have declined slightly. 24H1 benefited from the year-on-year abundance of incoming water. The number of hours the company used hydropower was 859.75 hours, an increase of 54.43% over the previous year. As a result, the hydropower generation capacity reached 2.78 billion kilowatt-hours, an increase of 54.43% year on year, but it was still 6% lower than the average for many years. Although the hydropower business situation has improved, it is still far from 22H1. Among the company's hydropower stations, with the exception of Guangzhao, the power generation capacity decreased by 6.79% year on year. The power generation capacity of all other hydropower stations increased by more than 30% year on year. The Qingxi Hydropower Station had the biggest increase in power generation, with a year-on-year increase of 266.69%. The company's photovoltaic power generation capacity was 0.372 billion kilowatt-hours, a year-on-year decrease of 7.56%, which has declined somewhat. 24H1's total power generation capacity was 3.152 billion kilowatt-hours, up 43.1% year on year, and profitability was greatly restored. In terms of feed-in tariffs, the company's average feed-in price after utility tax was 0.2718 yuan/kilowatt-hour, down 0.56% year on year; the average feed-in price after PV tax was 0.3295 yuan/kilowatt-hour, down 3.8% year on year. The comprehensive average feed-in price was 0.2786 yuan/kilowatt-hour, down 2.59% year on year, and overall remained stable. The company's performance growth was mainly driven by the restoration of hydropower generation.
Capital investment budgets have been lowered, and mid-term dividends have shown confidence in development. The company's capital investment and expenditure budget in 2024 was 0.213 billion yuan, down 62.63% from the previous year. Of these, the investment budget was 0.05 billion yuan, which will be used for the construction of the Bacao Phase I photovoltaic power plant in Zhenning. The reduction in capital investment during the year will provide the company with more sufficient cash flow to repay debts or dividends. On August 27, the company announced the mid-term dividend plan. The dividend payment rate reached 32.10%, up from 30.68% in 2023, demonstrating the company's confidence in future development.
The deleveraging process continues to be promoted, and the financial cost control effect is remarkable. 24H1's balance ratio was 58.32%, down 3.43pct year on year, down 20.58pct from the same period in 2015. Interest-bearing debt was about 8.506 billion yuan, down 8.46% year on year, down 35.21% from the same period in 2015. The company continued to promote the deleveraging process, gradually improving its capital structure, and is at a low level in the hydropower industry. At the same time, the company's financial cost control effect was remarkable. 24H1's financial expenses were 0.139 billion yuan, down 16.81% year on year, down 65.76% from the same period in 2015. At the same time, the company plans to replace high-interest stock loans due in the next year. The financing scale is about 1 billion yuan. After considering the replacement of the company's high-interest maturing debt, it will drive profit upward from the cost side.
Investment advice: The company's hydropower generation capacity is continuously repaired, and new energy projects are put into operation. We expect net profit to be 0.502/0.59/0.651 billion yuan in 24/25/26, and 1.17/1.38/1.52 yuan for 24/25/26, respectively. The PE corresponding to the closing price of August 27 is 15/12/11 times, respectively, maintaining the “recommended” rating.
Risk warning: Incoming water in the watershed has dried up; electricity prices fluctuate in market transactions; new project construction progress falls short of expectations.