| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 22.56 | 98 |
| Intrinsic value (DCF) | 3.74 | -67 |
| Graham-Dodd Method | 2.79 | -75 |
| Graham Formula | 0.62 | -95 |
Leshan Electric Power Co., Ltd. is a diversified utility company based in Leshan, China, serving as a critical infrastructure provider in Sichuan province. Founded in 1988 and listed on the Shanghai Stock Exchange, the company operates primarily in regulated electric power distribution while expanding into complementary sectors including natural gas distribution, tap water services, sewage treatment, hotel services, and photovoltaic new energy projects. As a regional utility player, Leshan Electric Power benefits from stable, regulated revenue streams from its core electricity operations while strategically diversifying into growth areas like renewable energy. The company's integrated utility model positions it to capitalize on China's ongoing urbanization and energy transition initiatives. With operations spanning multiple essential services, Leshan Electric Power plays a vital role in the regional economic ecosystem, providing reliable infrastructure to both residential and commercial customers while maintaining a focus on sustainable development through its photovoltaic investments.
Leshan Electric Power presents a mixed investment profile characterized by stable regulated utility revenues offset by modest profitability and limited growth prospects. The company's 0.717 beta indicates lower volatility than the broader market, typical of utility stocks, while its diversified operations across electricity, gas, water, and renewable energy provide some revenue stability. However, concerning metrics include minimal net income margins (0.7% of revenue), zero dividend distribution despite positive earnings, and negative free cash flow after accounting for capital expenditures. The company's modest market capitalization of approximately CNY 6.6 billion positions it as a small-cap utility, potentially limiting institutional investor interest. While the regulated nature of its core business provides revenue predictability, investors should note the company's thin profitability, significant capital expenditure requirements, and exposure to regional economic conditions in Sichuan province.
Leshan Electric Power operates in a highly fragmented Chinese utility market where competition is primarily regional rather than national. The company's competitive position is defined by its geographic monopoly in electricity distribution within its service territory, a characteristic of China's regulated utility framework. This provides a stable revenue base but limits growth opportunities to regional economic expansion and regulatory-approved rate increases. The company's diversification into natural gas, water, and sewage treatment creates cross-selling opportunities and operational synergies, though each of these sectors faces its own regulatory constraints and competitive dynamics. The photovoltaic new energy segment represents a strategic growth initiative aligned with national renewable energy policies, but Leshan faces intense competition from specialized solar developers and larger state-owned enterprises with greater financial resources. The company's relatively small scale compared to national utility giants limits its ability to achieve economies of scale in procurement and operations. Its competitive advantage lies in its entrenched position as the primary utility provider in its service area, regulatory protections, and integrated service model that creates customer stickiness. However, this must be balanced against the challenges of operating multiple utility businesses simultaneously without the scale advantages of larger competitors.