The power plant EPC and power generation business are the main sectors, and the power plant business continues to improve. In the first half of 2024, the installed capacity of the company's own power plants reached 6.02 GW, an increase of about 47%; the new installed capacity was about 842 MW, an increase of 35% over the previous year; the completed power generation capacity was about 3.283 billion kWh, an increase of 43.93% over the previous year.

In the first half of 2024, the company added 2.8 GW of overseas project reserves, while continuing to promote the subsequent development of reserve projects. Among them, the Saudi 400MW project, which was tendered in 2023, has signed a general engineering contract, and the financing arrangement has reached the expected goals; the general engineering contract for the 200MW project in Colombia has been determined, etc., and a closed-loop profit model from project development to sale has been achieved.

The transfer of power plants has become a new engine of growth, and comprehensive energy services are being actively explored. The company gradually completed the transformation to asset-light, accelerated the transfer of various types of power plants, and continuously optimized the company's business development model and asset structure.

Among them, the company uses photovoltaics for household use, determines production, accelerates the pace of inventory digestion, and lays out a more asset-light cooperative pre-acquisition model. In the first half of the year, 55 MW of industrial and commercial distributed power plants and 131 MW of household photovoltaic power plants were transferred; in the second half of the year, Spain plans to transfer 175 MW photovoltaic power plants and 300 MW centralized power plants in Guangdong. The company actively explores comprehensive energy services such as energy storage and electricity sales. In the first half of the year, the company added 1.6 GWh of energy storage projects and added 59 MWh connected to the grid. Currently, the scale of its own independent energy storage power plant has reached 284 MWh. At the same time, the company's electricity sales business continued to be profitable, achieving 679 signed customers, 2.653 billion electricity contracts, and 6.8 billion electricity transactions, an increase of 11% over the previous year.

Actively participate in green power transactions to build the core competitiveness of the proxy operation and maintenance business. In the first half of 2024, the company launched various types of green electricity transactions, reaching 24.5 billion, and 0.1069 million green certificate transactions. Jiangxi Phase I 200MW power plant's green power transaction volume reached 76 millionkWh. The repayment of green electricity subsidies will accelerate in the second half of the year, and the quality of cash flow is expected to improve, and the risk of impairment will decrease. Focusing on power plant revenue, the company has built the core competitiveness of the maintenance business by combining professional operation and maintenance with refined operation capabilities for power transactions. As of the first half of 2024, the capacity of the company's Daiwei power plant was about 1.14 GW (excluding household use), with an additional contracted capacity of 327 MW.

Investment advice: We expect the company to achieve revenue of 4.774/5.5/6.346 billion yuan in 2024-2026, net profit to mother of 0.542/0.633/0.722 billion yuan respectively, EPS 0.15/0.18/0.20, and PE 22/18/16 times, respectively. This is the first coverage, giving it a “recommended” rating.

Risk warning: Household PV transfers fall short of expectations; risk of inventory impairment; risk of bad debt loss.