Description of the event

The company issued a power generation data announcement: As of September 30, 2024, the company has accumulated 56,846,592 megawatt-hours of power generation in 2024, an increase of 2.42% over the same period in 2023. Among them, wind power generation decreased by 1.82%, thermal power generation decreased by 6.32%, and other renewable energy generation increased by 82.76%.

Incident comments

Wind power pressure was relieved, and photovoltaics maintained excellent performance. The company's wind power generation completed 12.277 billion kilowatt-hours in the third quarter, up 6.16% year on year. The growth rate changed from negative to positive. The growth rate rebounded 16.92 percentage points from the second quarter. Wind power pressure improved significantly. The main reasons were: 1) The high base pressure in the second quarter was relieved, while the company's wind power generation in the third quarter of last year decreased 2.51% year on year; 2) Affected by the typhoon, the company's wind power generation in Jiangsu Province increased by 3.13 year on year, respectively. 24 % and 93.28%. In addition to Jiangsu, Zhejiang, and Shanghai, wind power also achieved rapid growth. As a result, the company's wind power generation capacity reached 28.64% year-on-year growth in September. Compared with the 6.97% year-on-year decrease and 0.20% increase in wind power generation in July and August, respectively, the excellent power performance of wind power in September was the key reason for positive electricity growth in the third quarter. In addition, the company generated 2.233 billion kilowatt-hours from other renewable energy sources in the third quarter, up 41.75% year on year, and the growth rate fell 33.67 percentage points from month to month. In addition, due to possible hydropower squeeze, the company's thermal power generation capacity in the third quarter was 2.255 billion kilowatt-hours, a year-on-year decrease of 13.86%. Overall, wind power in the company's main business changed from negative to positive year over year, and the third quarter results are expected to lead to a marginal release of pressure.

Acting proactively, demonstrating leading responsibility. In November of last year, the company announced the H share repurchase plan; in February 2024, the company also issued the “Notice on the “Double Improvement of Quality and Return” action plan. The company announcement once again mentioned that it attaches great importance to investor relationship management, establishes a multi-level healthy interaction mechanism, conveys the company's value information with high quality, and implements a “long-term, stable and sustainable” shareholder value return mechanism. At the beginning of the year, the State Assets Administration Commission stated that it would further study and include market value management in the performance assessment of central enterprise leaders. The action plan announced by the company was also a timely response to the relevant requirements of the State Assets Administration Commission. Against the backdrop of overall pressure on the industry, the company acted proactively, reflecting its responsibility as a leading company in the new energy power generation operation industry.

The green power industry will stay up all night, and the leaders are expected to benefit deeply. We always emphasized in “The Long Night Will Dawn, Let's Discuss New Energy Industry Chain Opportunities” in February that the construction and commissioning of UHV will ease the pressure on green power consumption, and that the expansion of green power transactions will become a key requirement for the green power industry to break the situation. Since this year, we have been able to clearly see positive changes at the policy level. Whether it is the announcement in May that new energy-intensive enterprises will be forced to use 20% of their energy consumption in 2024-2025, or Inner Mongolia's July request to gradually promote the mandatory use of green electricity with high energy reserves over the next two years, the implementation of the policy has verified our views at the beginning of the year. The industry is about to stay awake. We are still optimistic about investment opportunities supported by the green power sector policy for a long time, and the company, as a green power leader, is expected to benefit deeply from the reversal of the bottom of the industry.

Investment advice and valuation: Based on the latest financial data, we adjusted the company's profit forecast. We estimate that the EPS for 2024-2026 will be 0.86, 1.01 and 1.12 yuan, respectively, and the corresponding PE will be 18.62 times, 15.95 times, and 14.33 times, respectively, maintaining the company's “buy” rating.

Risk warning

1. The risk that the commissioning progress and benefits of new construction projects fall short of expectations;

2. Wind conditions and lighting resources fall short of expected risks.