The monopoly of resources ensures that the company has room to grow. The company is a power resource monopolist in the region with the richest hydropower resources in China. On the one hand, the power supply business franchise guarantees the company's monopoly on the power supply area; on the other hand, the majority shareholders Sichuan Electric Power Company and the Liangshan State-owned Support Company have clearly taken the attitude of expanding and strengthening on the main line of “power grid+power station,” and the company has determined its dominant position in the development of small and medium-sized hydropower and photovoltaic resources in the region. The shareholder background of “provincial key power state-owned enterprises+Liangshan state-owned enterprises” is conducive to a new round of expansion of the company. This is the logic behind our recommendation of the company. Whether the Sichuan Electric Power Company or the Sichuan Hydropower Investment Group are potential controlling shareholders of the company, they will work with the Liangshan State Assets Administration Commission to turn the company into a “power grid+power station” development and operation platform for the local “power station+grid+high capacity” electrometallurgical integration industry chain. At that time, the amount of electricity being sold will grow driven by mining and metallurgy development, and the installed capacity for power generation will continue to expand. Profit forecast and investment advice: We expect the company's EPS for 2009-2011 to be $0.494, $0.304, and $0.378, respectively, after excluding non-recurring profit and loss of $0.173 per share in 09. Considering the company's low hydropower base and high room for growth due to on-hand development and installation, and considering the opportunities for epitaxial expansion brought about by future shareholder integration of the company, our initial rating for the company is “buy,” and the target price is 9.12 yuan, equivalent to 30x10PE. Risk: The future risks are mainly due to the difficulty of reaching agreement on the company's development dominance among shareholders due to the close equity ratio, and the shift in national hydropower development policies from encouragement to control; and cyclical fluctuations in the economy will amplify fluctuations in the company's electricity sales volume through the electricity demand of local high-capacity enterprises.