Revenue declined year-on-year due to the divestment of the oil business, and performance increased dramatically due to improved incoming water and changes in fair value profit and loss. In the first three quarters of 2024, the company achieved operating income of 2.917 billion yuan, a year-on-year decrease of 80.27%; net profit to mother 0.45 billion yuan, up 1987.94% year on year; net profit after deducting non-return to mother 0.186 billion yuan, an increase of 284.40% year on year. In the third quarter, the company achieved operating income of 0.998 billion yuan, a month-on-month increase of 5.05%; net profit to mother of 0.438 billion yuan, an increase of 537.43% month-on-month; net profit after deducting non-attributable net profit of 0.081 billion yuan, a decrease of 18.84% month-on-month. The sharp increase in the company's performance mainly includes an increase in profit and loss changes in other non-current financial assets held at fair value; an increase in incoming water from various hydropower plant basins and an increase in profits in the hydropower production business; a year-on-year increase in self-generated power generation, a decrease in electricity purchase costs, and an increase in profits from the electricity sales business. By industry, in the first three quarters, the company's hydropower business achieved net profit of 0.232 billion yuan, an increase of 0.126 billion yuan; the thermal power business achieved net profit of -0.147 billion yuan, a year-on-year decrease of 0.033 billion yuan; the wind power business achieved net profit of 0.012 billion yuan; and the power supply business achieved net profit deducted from mother 0.35 billion yuan, an increase of 0.085 billion yuan over the previous year; measured at fair value Changes in profit and loss of other non-current financial assets affected net profit attributable to mother of 0.235 billion yuan, an increase of 0.158 billion yuan over the previous year. China Sea Securities's fair value changed by 0.266 billion yuan, dividends were 0.009 billion yuan, GLOBAL NEW MAT fair value changed by 0.011 billion yuan; and losses in the oil divestment business were reduced by 0.023 billion yuan.

The construction of new energy projects is progressing in an orderly manner. By the end of August 2024, the company's Fangchenggang offshore wind power project had 45 grid-connected units, with a total capacity of 0.3825 million kilowatts, and the total capacity of 0.7 million kilowatts of the project is expected to be connected to the grid within 2024; the 0.55 million kilowatt onshore wind power project has established Eight Step New Energy Co., Ltd. and Pinggui New Energy Company, and the project is progressing in an orderly manner. Invest in the Yinshan Photovoltaic Power Generation Project (Phase I) in Qianjiang Town, Xingbin District, Laibin City, with a planned total installed capacity of 108.3 MW. The project is undergoing tendering, procurement and contract signing, and approval of the relevant procedures for the project.

Continued divestment of non-main business assets. The company plans to transfer 100% of its shares in Guangxi Guidong New Energy Technology Co., Ltd. to Guangxi Guangtou Petrochemical Co., Ltd. through a non-disclosure agreement. The transaction price is 0.031 billion yuan. Guidong New Energy's original main business was oil products business, and later changed its business scope to wind power generation technical services, etc., but it has never actually carried out related business. The company's current transfer of Guidong New Energy to divest non-main assets, focusing on another substantial action in the main power industry.

Risk warning: Electricity prices have been lowered, incoming water has fallen short of expectations, project progress has fallen short of expectations, and policy changes.

Investment advice: Raise profit forecasts and maintain the “better than the market” rating. Taking into account factors such as improvements in the company's incoming water supply, increased performance in the electricity sector, and increased profit and loss due to changes in fair value, we expect net profit to be 0.456/0.526/0.605 billion yuan (originally 0.186/0.477/0.583 billion yuan) and EPS of 0.31/0.36/0.41 yuan, corresponding to the current stock price PE of 16.3/14.2/12.3X, maintaining a “superior to the market” rating.