| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 21.49 | 52 |
| Intrinsic value (DCF) | 5.45 | -61 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 0.26 | -98 |
Sichuan Xichang Electric Power Co., Ltd. is a regional electric utility company operating in Liangshan Yi Autonomous Prefecture, Sichuan Province, China. Founded in 1980 and headquartered in Xichang, the company specializes in hydroelectric power generation and distribution with an installed capacity of 124,800 kilowatts. As a regulated electric utility, Sichuan Xichang plays a critical role in providing reliable electricity to one of China's developing regions while contributing to the country's renewable energy goals through its hydroelectric infrastructure. The company operates in the utilities sector with a focus on sustainable power generation, serving both residential and commercial customers across Liangshan prefecture. With China's ongoing emphasis on clean energy transition and rural electrification, Sichuan Xichang Electric Power represents an important component of Sichuan province's energy infrastructure, leveraging the region's abundant water resources for power generation while supporting local economic development.
Sichuan Xichang Electric Power presents a mixed investment profile characterized by stable regulated utility operations but significant financial challenges. The company's low beta of 0.416 suggests defensive characteristics typical of utilities, potentially offering downside protection during market volatility. However, concerning financial metrics include minimal net income of CNY 8.3 million on revenue of CNY 1.45 billion, representing razor-thin margins of approximately 0.6%. The company carries substantial debt of CNY 1.76 billion against cash of CNY 200 million, indicating potential liquidity concerns. While the dividend yield of approximately 1.3% (based on current market cap) provides some income appeal, the highly leveraged position and weak profitability metrics suggest elevated financial risk. Investors should carefully consider the company's ability to service its debt while maintaining operations in China's competitive and regulated power market.
Sichuan Xichang Electric Power operates in a highly fragmented Chinese utility market with limited competitive advantages. As a small regional player with 124.8 MW of hydro capacity, the company lacks the scale efficiencies of larger provincial utilities. Its primary competitive positioning stems from its geographic monopoly in Liangshan prefecture, where it benefits from regulated returns and stable demand. However, this regional focus also represents a significant limitation, as the company has minimal diversification outside its service territory. The hydroelectric assets provide some cost advantage over thermal generators, particularly given China's carbon reduction targets, but the relatively small capacity limits economies of scale. The company faces competition from larger state-owned power generators that could potentially expand into its territory through grid interconnections. Regulatory risk is ever-present, as tariff structures are determined by government authorities rather than market forces. While the company's long-standing presence in the region provides operational experience and local relationships, its high debt load and thin margins constrain investment capacity for modernization or expansion, potentially leaving it vulnerable to more capitalized competitors.