Operating income increased slightly, and net profit to mother increased significantly. In the first three quarters of 2024, the company achieved operating income of 90.986 billion yuan (+0.40%), net profit to mother of 4.429 billion yuan (+56.22%), after deducting non-return net profit of 4.38 billion yuan (+100.04%). Among them, third-quarter revenue was 32.676 billion yuan (+0.80%), net profit attributable to mother was 1.321 billion yuan (+0.24%), and net profit not attributable to mother was 1.261 billion yuan (+37.24%). In the first three quarters of 2024, the company's slight increase in revenue was affected by a combination of falling electricity prices and electricity volume growth. In the first three quarters, the company's average feed-in price was 449.6 yuan/MWh (-3.98%), and the feed-in electricity volume was 202.119 billion kilowatt-hours (+4.10%). The main reason for the sharp year-on-year increase in the company's net profit to mother was the implementation and effectiveness of measures to improve quality and efficiency. The company's overall operating situation continued to improve through the implementation of fuel supply and price control to generate efficient electricity; the reason for the sharp increase in net profit after deducting the company's operating indicators were generally improving. At the same time, during the same period in 2023, the company's subsidiary Datang Anhui Power Generation Co., Ltd. disposed of part of Huainan Luoneng Power Company's shares, and net profit after deducting non-recurring profit and loss decreased by 0.32 billion yuan.

There was a slight increase in the amount of 2024Q3 coal power, a year-on-year decline in hydropower, and a large increase in electricity production from wind and solar energy sources.

In the third quarter of 2024, the company's feed-in electricity was 55.814 billion kilowatt-hours (+1.54%), gas and electricity feed-in electricity was 6.321 billion kilowatt-hours (+12.81%), hydropower feed-in 12.423 billion kilowatt-hours (-0.10%), wind feed-in 3.408 billion kilowatt-hours (+23.10%), and photovoltaic feed-in electricity was 1.755 billion kilowatt-hours (+47.43%).

The company continues to promote the construction of thermal power and new energy projects, and the scale of performance is expected to increase further. The company's net investment cash increased sharply in the first three quarters of 2024, reflecting the company's accelerated implementation of power projects, the orderly implementation of the company's thermal power and new energy power generation projects, and the gradual commissioning of the company's projects under construction in the future, and performance is expected to continue to grow.

Risk warning: Electricity volume is falling; electricity prices are falling; coal prices are rising; incoming water is getting worse; project operation falls short of expectations.

Investment advice: Maintaining the profit forecast, the company's net profit for 2024-2026 is expected to be 5.03/5.62/6.18 billion yuan, respectively, up 268.1%/11.9%/9.9% year-on-year; EPS is 0.27, 0.30, and 0.33 yuan, respectively; the PE corresponding to the current stock price is 10.7/9.6/8.7X. The company was given 11-12xPE in 2024. The company's reasonable market value is 55.3-60.3 billion yuan, corresponding to a reasonable value of 2.99-3.26 yuan/share. There is room for a 10%-20% premium compared to the current stock price, maintaining a “superior to the market” rating.