Description of the event

The company released its 2024 three-quarter report: in the third quarter of 2024, the company achieved operating income of 2.887 billion yuan, a year-on-year increase of 6.85%; realized net profit to mother of 0.154 billion yuan, a year-on-year decrease of 49.63%.

Incident comments

Dry incoming water limited the amount of self-generated electricity, putting pressure on the operating results in a single quarter. In the third quarter of 2024, the company's self-generated electricity generation reached 0.648 billion kilowatt-hours, a year-on-year decrease of 38.94%. Although demand weakened, the company's electricity sales in the third quarter reached 4.066 billion kilowatt-hours, an increase of 10.68% over the previous year. In terms of electricity prices, the average price of electricity sold by the company in the third quarter of 2024 was 0.4789 yuan/kilowatt-hour (excluding tax), a year-on-year decrease of 3.27%. Overall, however, the year-on-year increase in electricity sales led the company's revenue performance. The company achieved revenue of 2.887 billion yuan in the third quarter, an increase of 6.85% over the previous year. However, due to a decrease in the share of self-generated power generation, the company's main electricity business operations were under pressure. As a result, the company's gross margin for the third quarter was 9.91%, down 7.82 percentage points from the previous year. The company achieved net profit of 0.154 billion yuan in the third quarter, a year-on-year decrease of 49.63%.

Focus on moving forward, and there is plenty of room for long-term growth. Despite pressure on short-term business performance, the company insisted on returning profits to shareholders. The company disclosed a profit distribution plan for the first three quarters of 2024, and plans to distribute a cash dividend of RMB 0.05 (tax included) per share, totaling 94.66 million yuan in cash dividends. In addition, the company has already implemented a repurchase of 20.46 million yuan in the first three quarters using centralized bidding. The total amount of the two has reached 0.115 billion yuan, accounting for about 30.04% of the net profit attributable to shareholders of listed companies in the current consolidated statement, showing that the company is Great importance is placed on shareholder returns. In addition, the company currently has sufficient projects. As of the end of the first half of the year: 1) In terms of combustion engines, the 0.49 million kilowatt Chongqing municipal key project - Yongchuan District cogeneration project was completed and put into operation, construction of the Fuling Baitao 0.49 million kilowatt gas cogeneration project began, and the 0.49 million kilowatt gas power generation project in Wanzhou Economic Development Zone accelerated preliminary work; 2) The comprehensive energy business is progressing steadily. The company still has a 2x135 megawatt waste gas resource comprehensive utilization BOT project. The 0.08 million kilowatt cogeneration phase II project, the Chongqing Liangjiang Cooperative Innovation Zone distributed energy station (phase II) project with an investment of 0.116 billion yuan and the natural gas distributed energy project of the Liangjiang Branch of Chongqing Ninth People's Hospital are expected to be put into operation within the year; 3) The new energy business is developing rapidly, and the Wuxi Changgui (Phase I) 36 MW agricultural and solar complementary photovoltaic power generation project within the network and the 24.61 MW centralized photovoltaic power generation project in Wuling and Yudu in Wanzhou are expected to be put into operation within the year. Therefore, the company's rich on-going projects will become an important source to guarantee the company's long-term growth, and the company's growth attributes are still stable.

Investment advice: According to the latest financial data, we adjusted the company's profit forecast. The company's 2024-2026 EPS is expected to be 0.31 yuan, 0.38 yuan, and 0.46 yuan, corresponding to PE of 24.08 times, 19.21 times, and 16.08 times, respectively. Maintain a “buy” rating.

Risk warning

1. Incoming water falls short of the expected risk;

2. The expansion of the project falls short of the expected risk.