Jinwu Financial News | Haitong Securities said that China Resources Electric (00836) was founded in 2001 and is a leading domestic “fire to green” high-quality enterprise. By the end of '23, the company's equity installed capacity reached 59.76 million kilowatts, of which about 3717, 1862, 344, and 540,000 kilowatts of thermal power/wind power/photovoltaic/hydropower respectively. In '23, the company achieved main business revenue of HK$103.3 billion, YOY +0.03%; net profit to mother of HK$11 billion, YOY +56.2%.
According to the bank, thermal power assets are of high quality and have location advantages, and the decline in coal prices is expected to drive performance elasticity. Considering the distribution of the company's power plants, the bank expects the company's electricity prices to decline slightly in 24 years. As the electricity and coal supply and demand pattern becomes relaxed, the decline in coal prices is expected to further boost the flexibility of thermal power performance. Assuming a decline in coal prices of 60 yuan/ton, it is estimated that the company's profit attributable to the thermal power sector will increase by HK$1.72 billion to HK$4.57 billion. Scenery installation construction wants to be accelerated. The target is 10 GW in 24 (7 GW in 23). Guided by the company's installed capacity target, the bank estimates that the company's net profit share of the renewable energy sector is expected to increase by HK$1.65 billion to HK$9.73 billion in 24.
The bank expects the company to achieve net profit of HK$143, 172, and 18.9 billion in 2024-26, with earnings per share of HK$2.98, 3.58 and HK$3.94. Referring to comparable company valuations, considering the high quality of the company's assets, the company was given 7-9 times PE in 24 years; the corresponding reasonable value range was HK$20.86-26.82, and the initial coverage was given an superior rating over the market.