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　　 Changjiang Securities

Event description:

　　 Guodian Power The third quarter report of 2012 and the private offering plan are released today, with the main contents as follows:

In the first three quarters, the company realized an operating income of 40.785 billion yuan, up 10.54% year on year; The attributable net profit was 2.348 billion yuan, up 13.83% year on year; Basic earnings per share was 0.152 yuan, up 12.59% year on year.

It is planned to issue A shares in a non-public offering, with the number of no more than 1834862384 shares and the price of 2.18 yuan per share. The total amount of funds raised this time will not exceed 4 billion yuan. The amount of A-shares to be subscribed by China Guodian and the social security fund will each account for 50% of the total amount of funds raised.

Event comment:

The gross profit rate continued to rise in the third quarter, and the performance basically met the expectations: the company's operating income in the first three quarters was 40.785 billion yuan, up 10.54% year on year; The operating cost was 32.703 billion yuan, up 6.5% year on year. In the third quarter, the company realized an operating revenue of 14.085 billion yuan and an operating cost of 10.844 billion yuan, up 8.7% and 1.1% year on year respectively; The revenue growth was mainly due to the growth of power generation in the first three quarters and the increase of electricity price at the end of last year. The gross profit rate and net profit rate of the company in the third quarter were 23.01% and 11.69%, respectively, up 2.73 percentage points and 2.11 percentage points month on month. The main reason for the increase of gross profit margin is that the unit fuel cost of the company has decreased month by month during the reporting period. In the first three quarters, the company realized a net profit of 2.348 billion yuan, up 13.83% year on year; The EPS in the first three quarters was 0.152 yuan, 0.019 yuan, 0.059 yuan and 0.074 yuan respectively.

The electricity in the third quarter maintained a positive growth, which was significantly better than the industry average: from January to September, the company completed a total of 116.347 billion kilowatt hours of electricity generation, and 110.07 billion kilowatt hours of on grid electricity, with year-on-year growth of 3.34% and 3.54% respectively.

In the third quarter, the company's single quarter power generation and on grid electricity were 42.887 billion kWh and 40.784 billion kWh respectively, up 7.24% and 7.64% respectively from the same period last year. Against the background of continuous downward growth of industrial economy, the company's operation in the third quarter was significantly better than the industry average, mainly due to: 1) the impact of increased rainfall and better inflow this year. 2) The utilization hours of the company's units are higher than those of the same scale in the region. As of the end of the reporting period, the company's holding installed capacity reached 32135400 kilowatts, of which thermal power accounted for 71.30%, hydropower, wind power and photovoltaic accounted for 22.55%, 5.85% and 0.30% respectively.

Investment theme and profit forecast: The company will grow steadily. The smooth operation of Daduhe and coal power integration projects will further enhance the company's profitability. This non-public offering will enrich the company's working capital and reduce the company's asset liability ratio to about 76% (it is expected to complete the additional issuance at the beginning of next year). We expect the company's EPS from 2012 to 2014 to be 0.24 yuan, 0.28 yuan and 0.33 yuan respectively, corresponding to the PE of 10.07 times, 8.36 times and 7.13 times, lower than the industry average, so it still maintains the "recommended" rating.

Risk warning: the future coal price will rise more than expected; Due to the decline of macroeconomic prosperity, the power load has declined rapidly.