Huaneng Hydropower(600025) 天风证券·2024-10-31 08:01Investment Rating - The report maintains a "Buy" rating for the company, with a target price not specified [5]. Core Views - The company achieved a revenue of 19.42 billion yuan in the first three quarters of 2024, a year-on-year increase of 7.1%, and a net profit attributable to shareholders of 7.23 billion yuan, up 7.8% year-on-year. However, in Q3 alone, revenue was 7.54 billion yuan, down 1.3% year-on-year, and net profit was 3.06 billion yuan, down 7.4% year-on-year [1]. - The total power generation for the first three quarters of 2024 was 86.026 billion kWh, an increase of 3.82% year-on-year, primarily driven by significant increases in renewable energy installations and improved water inflow in certain river basins [2]. - Despite a 5.9% year-on-year decline in hydropower generation in Q3, the company demonstrated resilience in electricity prices, with a composite on-grid electricity price of approximately 0.193 yuan/kWh, up from 0.186 yuan/kWh in the same period last year [3]. - The company is expected to face short-term cost increases due to the commissioning of new units, but these will contribute to profit growth in the long term as installed capacity continues to expand [3]. Financial Summary - The company is projected to achieve net profits of 8.24 billion yuan, 9.17 billion yuan, and 9.75 billion yuan for the years 2024, 2025, and 2026, respectively, with corresponding P/E ratios of 21.5x, 19.3x, and 18.2x [4]. - Revenue is expected to grow from 26.47 billion yuan in 2024 to 30.92 billion yuan in 2026, with growth rates of 12.82%, 10.30%, and 5.92% for the respective years [4]. - The company’s total assets are projected to reach 202.41 billion yuan by 2024, with total liabilities of 127.71 billion yuan, resulting in a debt ratio of approximately 62.9% [7]. Cash Flow and Investment - The operating cash flow for 2024 is estimated at 17.43 billion yuan, with capital expenditures of 15.12 billion yuan, indicating a focus on investment in growth [8]. - The company is expected to maintain a healthy cash flow despite fluctuations in net profit, with a projected net increase in cash of 225.62 million yuan for 2024 [8].