煤价平稳、辅助服务落地、电量电价签订，关注新三部曲进程。展望Q3，火电电量受来水冲击影响环比大幅减弱，市场煤价稳中有降，业绩有望超预期；湖南、云南、河南辅助服务已征求意见，期待更多省份陆续落地；近期市场担忧明年电量电价，我们认为仍需观察Q4 现货煤价；火电盈利稳定性提升逻辑仍在持续验证中，关注新三部曲进程。Core views:
The controlling shareholder plans to increase the company's A-share holdings by 0.15%-0.21%, demonstrating confidence in long-term development. According to the shareholding increase announcement, Huaneng Group's concerted actor Huaneng Structural Adjustment No. 1 Fund increased its holdings of the company's 15 million A shares through centralized bidding; it also plans to increase its holdings within three months by no less than 0.15% of the total issued share capital and not higher than 0.21% (including this time). Looking back at the last increase in the Group's holdings as disclosed on May 13, 2020, the cumulative increase in H shares in the Hong Kong market within 6 months was no more than 2% of the company's total issued shares, and the final cumulative increase was 0.84%. Since the beginning of July, the company's A shares have declined by 32.6%, and H shares have fallen by 28.3%. The Group's current increase in holdings shows recognition of the company's value and confidence in future development.
I am optimistic that net assets will continue to recover, and the dividend value is outstanding. The restored net assets of 2024H1 were $55.9 billion (79.6 billion yuan excluding perpetual bonds), an increase of 6.4% over the end of the previous year. Looking ahead, steady profits from ancillary services are growing rapidly, and current ROE continues to recover net assets. According to the company's articles of association, considering the 2024 results after deducting interest on perpetual bonds, the corresponding cash dividend is about 4.1 billion yuan, and the dividend rate corresponding to the latest closing price of A/H is 3.9%/6.9%.
Coal prices are stable, auxiliary services have been implemented, electricity prices have been signed, and attention is being paid to the progress of the new trilogy. Looking ahead to Q3, the impact of the impact of incoming water power declined sharply from month to month, and coal prices in the market are falling steadily, and performance is expected to exceed expectations; Hunan, Yunnan, and Henan auxiliary services have been solicited for comments and are expected to be implemented in more provinces; recently, the market is worried about next year's electricity prices, so we think we still need to observe Q4 spot coal prices; the logic of improving thermal power profit stability is still being verified, keeping an eye on the new trilogy process.
Profit forecasting and investment advice. EPS is expected to be 0.70, 0.80, and 0.90 yuan/share from 2024 to 2026, respectively, and the latest closing price corresponding PE is 9.46, 8.24, and 7.36 times. Profitability of thermal power is expected to stabilize, and electricity reform promotes value reshaping. Referring to comparable company valuations, 13 times PE was given in 2024, corresponding to a reasonable value of 9.05 yuan/share, corresponding to a reasonable value of HK$5.70 per share for H shares (see AH share premium ratio), and the “buy” rating for A/H shares was maintained.
Risk warning. The risk that coal prices will continue to rise; the risk of utilization of hours and project construction falling short of expectations.
