电力业务：目前在运行参控股火电装机达4.6GW，我们预计未来2年装机规模有望倍增。根据2024年中报及利辛电厂二期相关公告，截至三季度末，利辛电厂二期机组投产后，公司控股在运行发电机组达到3.34GW，同时参股宣城电厂装机1.29GW。未来2年，我们预计上饶电厂、滁州电厂和六安电厂有望逐步建成投产，公司装机规模有望倍增，煤电一体化优势将更加突出。Core views:
The Q3 net performance increased 17% month-on-month. Profitability has improved markedly and steadiness over the past three years. The company is a comprehensive coal+power energy supplier under China Coal Group. According to the 2023 annual report, the coal and power businesses achieved net profit of 1.74 billion yuan and 670 million yuan respectively, accounting for 72% and 28% respectively. Due to the high proportion of long-term cooperation in the coal business and the increase in the price center, the installed scale of the power business has gradually increased. The company's location advantages of integrating coal and electricity and being located at a high rate of electricity demand growth in the Anhui region have become apparent, and profitability has improved markedly. According to the company's three-quarter report, net profit attributable to mother for the first three quarters of 24 was 1.82 billion yuan, or -5.0% year-on-year. Among them, Q3 net profit without return to mother was 0.65 billion yuan, +6.4% year over year and +16.8% month over month.
Coal business: Mainly sales from Changxie, with good cost control. We are monitoring the progress of Yangcun mine approval in the medium to long term. According to the company's 2024 interim report, as of the end of June 2024, the company had 5 pairs of production mines, with a total production capacity of 23.5 million tons/year. Furthermore, approval for the construction of the Yangcun mine (5 million tons/year) is still ongoing. The company is located in the Huainan mining area. It is rich in coal resources, and the remaining extractable period of coal mines is generally at least 40 years. The company's coal sales are mainly based on Changxie. Prices have been stable over the past three years. The cost per ton of coal has fluctuated between 330-350 yuan/ton, and the cost control capacity is strong.
Electricity business: Currently, the installed capacity of participating thermal power has reached 4.6 GW, and we expect the installed capacity to double in the next 2 years. According to the 2024 interim report and announcements related to the second phase of the Lixin Power Plant, by the end of the third quarter, after the second phase of the Lixin Power Plant was put into operation, the company's holdings reached 3.34 GW of generator sets, and also participated in 1.29 GW of the installed capacity of Xuancheng Power Plant. In the next 2 years, we expect the Shangrao Power Plant, Chuzhou Power Plant, and Lu'an Power Plant to be gradually completed and put into operation. The company's installed capacity is expected to double, and the advantages of integrated coal and electricity will become more prominent.
Profit forecasting and investment advice. The company's EPS is expected to be 0.87, 0.95, and 1.00 yuan/share in 24-26, respectively. Combined with comparable company valuations, the company was given 11 times PE in 25 years, corresponding to a reasonable value of 10.50 yuan/share for A-shares, covering the first time, and giving the company a “buy” rating.
Risk warning. Downstream demand performance may be low, the company's Yangcun coal mine approval process may be slow, and the financing scale and financial expenses for the next 2 years will be high, etc.