CCIC Energy Holdings started construction of power plants, which are expected to be put into operation one after another in 25-26, and the installed scale of thermal power plants is expected to continue to expand. Hebei's electricity consumption in January-October '24 was +5.79%. Under the electricity gap in winter, peak demand for thermal power was prominent. The company's shareholding shares in thermal power are all important power support for the Hebei power grid, and power generation is expected to continue to grow. Maintain an “Overweight” rating.

Construction of controlled shareholding power plants has begun, and it is expected that the scale of thermal power installed will continue to expand, and the company's thermal power installation will increase sufficiently. At the end of June '24, the company's coal power installed capacity was 10.45 million kilowatts; the Renqiu Thermal Power Phase II 2x0.35 million kW and Xibaipo Power Plant Phase IV 2x0.66 million kW projects controlled by the company have started construction and are expected to be put into operation as early as 2026; the Cangdong Power Plant Phase III 2x0.66 million kilowatts, Dingzhou Power Plant Phase III 2x0.66 million kilowatts, and Hengfeng Power Plant will expand 2x0.66 million kilowatts, all of which are expected in 2026 Production commenced. The company plans to purchase 50% of Qin Electric Company's shares and 50% of Zhunneng Company's shares from the majority shareholders, corresponding to 1.4/1.32 million kilowatts of coal power installed.

Peak demand for thermal power is highlighted, and the company's power generation capacity is expected to continue to grow

Electricity consumption in Hebei Province from January to October was +5.79%. The Hebei Electric Power Company predicts that the maximum load demand for the Hebei South Grid is expected to be yoy +2.2% to 4.3% in the winter of '24, and the maximum load demand for the Beibei Power Grid is expected to remain flat year on year; the power gap for the Hebei South Grid/Beibei Power Grid is 3.3/3.15 million kilowatts, respectively, and peak demand for thermal power is expected to be prominent. From January to October, the thermal power generation capacity in Hebei Province was +2.21%, and the average utilization time yoy was +1.87%; the company's shareholding shares in thermal power were all important power support for the Hebei Power Grid. The holding installed capacity accounted for 24.35%/24.55% of the coal-fired power installed capacity of the Hebei South Grid/Beibei Power Grid. The company's power generation capacity is expected to benefit from the increase in installed capacity and utilization hours.

Maintain profit forecasts and target prices

We expect the company's net profit to be 0.557/0.715/0.815 billion yuan in 24-26, with a year-on-year growth rate of +233%/+28%/+14%, corresponding to BPS of 5.69/5.82/5.94 yuan. Wind agreed that the average 25-year PB of comparable companies was 1.2x. Considering that the company's ROE was lower than the comparable average, the company was given 1.1xPB for 25 years, with a target price of 6.41 yuan.

Risk warning: The increase in coal prices exceeded expectations, the number of hours used fell, and the progress of projects under construction fell short of expectations.