The market value has increased by 530 billion in ten years! The stock price of "Hydropower First Brother" hit a new high

National Business Daily

2024-05-27 13:17Published on the official account of Sichuan Daily Economic News

Edited by: Bi Luming

As of the close of trading on the morning of May 27, the market was volatile and differentiated in early trading, and the Shanghai Composite Index was strong. The Shanghai Composite Index rose 0.37%, the Shenzhen Component Index fell 0.27%, and the ChiNext Index fell 0.65%. Overall, stocks fell more and rose less, and more than 3,900 stocks in the whole market fell.

On the disk, the concept of power and power grid stocks maintained a strong limit, Guangxi Energy, Zhongzhi Technology, Guodian Nanzi and other daily limits, among which the giant Yangtze River Power hit a record high, as of the close of the morning, the share price reached 26.65 yuan, and the market value was as high as 652.1 billion yuan.

Judging from the capital data, in the last 8 trading days, the stock has been continuously net bought by foreign capital, during which the stock has been traded by Shanghai Stock Connect with a total of 6.595 billion yuan, with a total net purchase of 2.154 billion yuan. Recently, Yangtze Power has been raised by Huatai Financial Holding to raise the target price to 31.19 yuan.

As of press time, the market value of Yangtze Power is about 643.5 billion yuan, an increase of about 81.4 billion yuan from the beginning of the year. Ten years ago, in March 2014, the market value of Yangtze Power was about 121.9 billion yuan, and the current market value increased by 530 billion yuan compared with 2014.

Why is Yangtze Power favored by funds?

In the first quarter of this year, Yangtze Power achieved a net profit attributable to shareholders of the parent company (hereinafter referred to as "net profit") of 3.967 billion yuan, continuing the growth momentum and hitting a new high in the same period in history.

Since 2016, the company's annual net profit has exceeded 20 billion yuan, and the net profit in 2023 will be 27.239 billion yuan, which is also a record high for the year. The stability of the company's profitability can be seen.

The tradition of high proportion and continuous and stable dividends is one of the important factors for funds to prefer Yangtze Power. In 2023, the company will distribute cash dividends of 20.064 billion yuan to shareholders. Since its listing, the company has paid a total of 182.8 billion yuan in cash dividends, close to 67% of the company's cumulative net profit.

Since 2014, the stock, like Kweichow Moutai, has continued to be in an upward channel, and its performance in the past two years has been significantly stronger than that of Moutai. According to the data, on May 24, the northbound funds traded a net sale of 4.039 billion yuan. Among the active stocks traded in Shenzhen-Shanghai Stock Connect, Yangtze River Power traded 840 million yuan throughout the day, with a net purchase of 154 million yuan, which was the eighth consecutive day of net buying, during which the stock was traded by Shanghai Stock Connect with a cumulative turnover of 6.595 billion yuan, with a total net purchase of 2.154 billion yuan.

Since 2016, the company's annual net profit has exceeded 20 billion yuan, and the net profit in 2023 will be 27.239 billion yuan, a record high for the year. Like China Shenhua, stable and high proportion of dividends is the main reason why funds prefer Yangtze Power. In 2023, the company will distribute cash dividends of 20.064 billion yuan to shareholders. Since its listing, the company has paid a total of 182.8 billion yuan in cash dividends, close to 67% of the company's cumulative net profit.

On the news side, according to the Securities Times, analysts believe that the main reason for the recent changes in the power sector is the high-level meeting held in Jinan on the 23rd. The participants put forward their opinions and suggestions on deepening the reform of the power system, developing venture capital, upgrading traditional industries with scientific and technological transformation, establishing and improving the governance system of private enterprises, optimizing the business environment for foreign-funded enterprises, promoting Hong Kong's better integration into the new development pattern, enhancing the people's sense of reform, promoting the integrated development of urban and rural areas, and improving the macroeconomic governance system. The reform of the power system ranks first and is also the most logical one.

Some institutions believe that from 2002~2015, the first round of deepening the reform of the power system. In 2015~2021, the second round of deepening the reform of the power system. Since 2021, the electricity price reform has been fully liberalized. China's current power market has entered a critical stage, and the next step must be to move towards a more market-oriented approach.

In places where the policy is not perfect, for example, although thermal power has a two-part electricity price, but the price limit of ancillary services and peak shaving income, how to mobilize enthusiasm? Mengxi Power Grid only implements 6 months of capacity electricity charges; After green electricity enters the market, how should electricity prices be combined with spot market transactions? The spot market is advancing slowly, and there are guidance prices for the promotion of goods, but in fact, there are still many places that need to continue to improve the policy. Therefore, it is necessary to reform, continue to improve marketization, and restore the reasonable rate of return of assets.

Zhongyuan Securities believes that Yangtze River Power is the largest listed power generation company in the A-share market, with stable operation and strong and stable profitability of the main hydropower business, as a value blue-chip benchmark and high dividend target, it has brought relatively rich returns to investors who hold it for a long time. In view of the overall dryness of the Yangtze River water supply in 2022 and 2023, the profitability improvement brought by the Wu and Bai power stations has not yet been fully reflected. Yangtze River Power is more optimistic about the water supply situation of the Yangtze River in 2024~2026, and it is expected that the company's annual power generation will gradually improve, and the company's profitability will reach a new level after the injection of Wubai hydropower station, and it is expected that the company's net profit attributable to the parent company in 2024~2026 will be 32.953 billion yuan, 35.519 billion yuan and 37.334 billion yuan respectively.

Daily Economic News, Comprehensive Securities Times, Brokerage Research Report

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