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Investment Rating - The report maintains a "Buy" rating for China Resources Power (836 HK) with a target price of HKD 27.55, indicating a potential upside of 17.0% from the current price of HKD 23.55 [1][8]. Core Insights - The company's installed capacity mix shows resilience against changes in utilization rates this year, with clear profit growth potential. Despite weak wind speeds and a slight increase in national power rationing, the company's wind and solar generation increased by 8% and 191% year-on-year in the first four months of the year [1]. - The report notes that the company's hydropower utilization recovery is weaker than expected due to regional hydrological conditions affecting projects in Yunnan and Sichuan. The forecast for hydropower utilization hours has been adjusted downwards by 1.6% [1]. - The high proportion of thermal power generation is beneficial, providing resilience to profitability amid declining wind and solar prices. A 1% change in thermal fuel costs is estimated to impact profits by approximately 2% for 2024/25, while a 1% change in wind/solar utilization hours is expected to affect profits by about 1.2% [1]. - The report adjusts the target price upwards to HKD 27.55 based on operational cost adjustments and hydropower utilization hours, while also lowering profit forecasts for 2024/25 by 0.5% and 1.3% respectively [1]. - The company has shown superior return on equity (ROE) compared to peers, contributing to its attractiveness in the market, especially with a focus on dividends [1]. Financial Overview - Revenue is projected to grow from HKD 103,305 million in 2022 to HKD 126,419 million by 2026, with a compound annual growth rate (CAGR) of approximately 7.5% [4]. - Net profit is expected to increase significantly from HKD 7,463 million in 2022 to HKD 23,347 million by 2026, reflecting a CAGR of around 25.5% [4]. - Earnings per share (EPS) is forecasted to rise from HKD 1.46 in 2022 to HKD 4.78 by 2026, indicating strong growth potential [4]. - The company’s dividend yield is projected to increase from 2.5% in 2022 to 8.1% by 2026, enhancing its attractiveness to income-focused investors [4]. Installed Capacity and Generation Forecast - The total installed capacity is expected to grow from 52,581 MW in 2022 to 88,507 MW by 2026, with the share of renewable energy increasing from 32.3% to 58.1% over the same period [5]. - The forecast for electricity sales indicates a significant increase, with total sales expected to rise from 184,604 GWh in 2024 to 250,723 GWh by 2026 [5]. Valuation Summary - The report utilizes a sum-of-the-parts valuation approach, estimating the value of thermal power at HKD 2.97 per share and renewable energy at HKD 24.58 per share, leading to a total valuation of HKD 27.55 per share [6].

Financial Data and Key Metrics Changes - The company expects the annual electricity demand to be between 4500-4600 hours, slightly lower than last year's 4680 hours, indicating a stable demand despite some structural changes in the market [1] - The company reported an improvement in the recovery of government subsidies, with a balance of 18.7 billion RMB in receivables and a recovery of 3.7 billion RMB last year, which is an increase of 1 billion RMB compared to the previous year [4] Business Line Data and Key Metrics Changes - The company noted that the wind power generation in the first four months saw a slight decrease in grid connection prices due to the increase in market-based projects, but the market-based green electricity trading premium remains high [2] - The company has 70% of its renewable energy projects included in the first compliance list, ensuring smooth access to subsidies [4] Market Data and Key Metrics Changes - The company highlighted that the electricity demand remains high, with some industries like real estate declining while others like new energy vehicles and photovoltaic manufacturing are compensating for the demand [1] - The company has not yet experienced significant power restrictions affecting electricity generation, particularly in the eastern, central, and coastal regions [2] Company Strategy and Development Direction - The management aims to maintain a dividend payout ratio of at least 40%, balancing growth, risk, and returns, while also targeting a clean energy ratio of over 50% by the end of the 14th Five-Year Plan [3] - The company is focused on high-quality growth and has been aligning its strategies with the requirements set by the State-owned Assets Supervision and Administration Commission (SASAC) [3] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued growth of electricity demand, particularly as the peak summer season approaches, despite some fluctuations in wind and hydropower generation [1] - The potential introduction of a wind and solar resource tax could increase operational costs and impact investment returns, but there is currently no clear indication of its implementation [2] Other Important Information - The company is actively following up on the second compliance list for subsidies to ensure continued financial support for its projects [4] Q&A Session Summary Question: How does the company view the demand for thermal power for the year? - The company expects thermal power demand to continue growing, with an annual level projected at 4500-4600 hours, slightly lower than last year's 4680 hours [1] Question: What impact has wind power abandonment had in the first quarter? - The company noted a slight decrease in grid connection prices for wind power but highlighted that market-based green electricity trading remains strong [2] Question: Will the proposed wind and solar resource tax affect profitability? - Management acknowledged the rumors but stated that they have not yet encountered such taxes, though implementation would increase operational costs [2] Question: What is the company's dividend policy? - The company aims for a dividend payout ratio of at least 40%, balancing growth and returns while ensuring risk is managed [3] Question: What is the status of government subsidy recoveries? - The company reported an improvement in subsidy recoveries, with a balance of 18.7 billion RMB in receivables and a recovery of 3.7 billion RMB last year [4]

Investment Rating - The report assigns a "Buy" rating for China Resources Power (0836.HK) with a target price of HKD 26.00, indicating a potential upside of 33.61% from the closing price of HKD 19.46 as of May 8, 2024 [4]. Core Insights - The company's profitability has significantly improved, driven by a decrease in fuel costs, with a notable 56.2% year-on-year increase in net profit to HKD 11.003 billion in 2023 [2]. - Renewable energy business has shown strong performance, contributing HKD 9.726 billion to core profits, which is a 12.52% increase from the previous year [2]. - The company plans to accelerate the construction of wind and solar projects, targeting an additional 10 GW of installed capacity in 2024 [2]. Financial Performance Summary - In 2023, the company achieved revenue of HKD 103.334 billion, with a slight increase of 0.03% year-on-year. The revenue from thermal power and renewable energy was HKD 80.053 billion and HKD 23.281 billion, respectively [3]. - The fuel cost decreased by 15.2% to HKD 54.509 billion in 2023, contributing to the overall profit growth [2]. - The company expects revenues for 2024 to reach HKD 109.859 billion, with a projected net profit of HKD 14.676 billion, reflecting a growth rate of 29.51% [3]. Dividend Policy - The company has a dividend payout ratio of 62% for 2023, with a total dividend of HKD 1.415 per share, including a special dividend of HKD 0.5 per share to celebrate its 20th anniversary [2].

Investment Rating - The report assigns a "Buy" rating for China Resources Power (0836.HK) based on its strong governance and better-than-expected performance in 2023 [3]. Core Insights - In 2023, the company achieved a net profit attributable to shareholders of HKD 11 billion, representing a year-on-year increase of 56.24%, positioning it as the leader among state-owned power enterprises in terms of profit size [3]. - The company's total revenue for 2023 was HKD 103.3 billion, a slight increase of 1.17% year-on-year, with a dividend payout ratio of 62% when including a special dividend [3]. - Renewable energy has become the main profit contributor, with core profits from renewable energy reaching HKD 9.726 billion, up 12.5% year-on-year, while thermal power turned profitable with core profits of HKD 3.611 billion [3][4]. Summary by Sections Financial Performance - The company reported a net profit of HKD 11 billion in 2023, a 56.24% increase from 2022, with a total revenue of HKD 103.3 billion [3][5]. - The operating profit margin improved to 17.6% in 2023, with a return on equity (ROE) of 11.73% [5][6]. Cash Flow and Receivables - The company’s net operating cash flow reached HKD 28.87 billion, the highest since 2016, marking a 19.46% increase year-on-year [4]. - Accounts receivable stood at HKD 32.8 billion at the end of 2023, reflecting a significant improvement compared to peers [4]. Future Outlook - The company plans to add 10 GW of new renewable energy capacity in 2024, with a total capital expenditure of HKD 59.9 billion planned for the year [4]. - Profit forecasts for 2024-2026 are projected at HKD 14.22 billion, HKD 16.06 billion, and HKD 18.28 billion respectively, with corresponding price-to-earnings ratios of 6, 5, and 5 times [4][5].

Financial Performance - The company's turnover for 2023 was HK$103,334,322, a slight increase from HK$103,305,097 in 2022[7]. - Profit attributable to owners of the company for 2023 was HK$11,003,283, representing a significant increase of 56.5% compared to HK$7,042,478 in 2022[7]. - Basic earnings per share attributable to owners of the company rose to HK$2.29 in 2023, up from HK$1.46 in 2022, marking an increase of 56.2%[7]. - The company declared a dividend per share of HK$1.415 for 2023, compared to HK$0.586 in 2022, reflecting a substantial increase[7]. - The total assets of CR Power reached HK$322,395,990 in 2023, up from HK$283,387,646 in 2022, representing a growth of 13.8%[7]. - The Group's profit for the year ended December 31, 2023, is detailed in the consolidated statement of profit or loss on page 149[92]. - The Group's distributable reserves amounted to HK$25,183,277,000 as of December 31, 2023, down from HK$27,561,957,000 in 2022[112]. - The Group's financial statements include detailed notes on borrowings and issued bonds, providing transparency on funding strategies[116][117]. Operational Capacity and Renewable Energy - As of December 31, 2023, CR Power's total attributable operational generation capacity was 59,764 MW, with renewable energy sources (wind, hydro-electric, and photovoltaic) accounting for 22,597 MW, or approximately 37.8% of the total capacity[3]. - The operational generation capacity in Central China increased to 16,635 MW in 2023, up from 15,081 MW in 2022, showing a growth of 10.3%[7]. - The renewable energy attributable operational generation capacity was 22,597 MW, indicating a significant focus on sustainable energy sources[11]. - The company is committed to increasing its renewable energy capacity, as evidenced by the substantial figures in both installed and attributable capacities across various regions[11]. - The company is expanding its distributed photovoltaic projects, with several installations across provinces, contributing to its renewable energy goals[13]. - The company reported a significant increase in new energy development, aligning with the national "double carbon" policy and energy security strategy[21]. - The company achieved a year-on-year reduction of 2.5% in comprehensive energy consumption per ten thousand yuan of output value[38]. Corporate Governance and Leadership - Mr. Song Kui was appointed as Executive Director and Vice Chairman in May 2023, bringing extensive experience from Chongqing Energy Investment Group[51]. - Mr. Zhou Bo joined as a Non-executive Director in October 2023, with over 30 years of experience in finance and corporate management[53]. - The company is focusing on expanding its business units and enhancing corporate governance through the appointment of experienced directors[51][53][55][57][59]. - The company emphasizes the importance of independent directors in its governance structure to ensure accountability and transparency[66]. - The board includes members with experience in public service and advisory roles, which may benefit the company's strategic initiatives[64]. Strategic Initiatives and Future Growth - The company aims to become a world-class clean energy supplier and integrated energy service provider, focusing on enhancing core competitiveness and energy technology innovation[25]. - Future growth strategies include enhancing operational efficiency and increasing the share of renewable energy in the overall energy mix[14][15]. - The company plans to enhance investments in strategic emerging industries focused on clean and efficient power generation, integrated energy services, and energy technology innovation[44]. - The company aims to ensure that the terms of financial assistance are no less favorable than those with independent third parties[179]. Connected Transactions and Financial Agreements - The Group conducted certain connected transactions with connected persons during the year, as required under the Listing Rules[159]. - The annual caps for the Integrated Energy Projects have been revised to RMB 300 million for the financial year ending December 31, 2023, and RMB 400 million for the financial year ending December 31, 2024[168]. - The Company continues to engage in connected transactions with CR entities, reflecting ongoing collaboration in various sectors[176]. - The annual caps for the Financial Assistance Framework Agreement for the three financial years ending December 31, 2025, are RMB900 million, RMB1,900 million, and RMB2,560 million, respectively[182]. Social Responsibility and Environmental Commitment - The company emphasizes the importance of corporate social responsibility, actively participating in disaster relief, student aid, and poverty alleviation initiatives[39]. - The Group is committed to environmental sustainability, focusing on resource conservation and promoting clean energy projects[98]. - The company is committed to green development and has integrated environmental protection concepts into its entire business lifecycle[38]. Market Recognition and Index Inclusion - CR Power has been included in the Hang Seng ESG 50 Index for four consecutive years, highlighting its commitment to sustainable development[4]. - The company was also selected as a constituent of the Hang Seng Index on June 5, 2023, reflecting market recognition of its strategic transformation[4].

Investment Rating - The report maintains an "OUTPERFORM" rating for China Resources Power Holdings [3][12]. Core Views - The thermal power sector has turned profitable, and the contribution from renewable energy is gradually increasing [2][11]. - The company achieved an operating revenue of HKD 103.34 billion in 2023, with a net profit of HKD 11.003 billion, reflecting a year-on-year growth of 56.2% [10][12]. - The report projects net profits for 2024, 2025, and 2026 to be HKD 14.47 billion, HKD 16.50 billion, and HKD 18.72 billion, respectively, with a target price of HKD 25.55 [12]. Financial Summary - The company reported a stable operating revenue of HKD 103.34 billion in 2023, with a year-on-year increase of 4.9% in Chinese yuan terms [10][11]. - The core profit contribution from renewable energy was HKD 9.726 billion, up 12.5%, while the thermal power business contributed HKD 3.611 billion, recovering from a loss of HKD 2.582 billion in 2022 [10][11]. - The average fuel cost for thermal power decreased by 12.6% to CNY 296.3 per megawatt-hour, contributing to the profitability of the thermal power sector [11][12]. Operational Highlights - As of the end of 2023, the installed thermal power capacity was 36.6 GW, accounting for 62.2% of total capacity, with electricity sales from thermal power increasing by 2.3% year-on-year [11]. - The new energy installed capacity reached 22.6 GW, with wind energy contributing 18.62 GW, and electricity sales from new energy increased by 19.26% [11][12]. - The average on-grid electricity price for wind energy in 2023 is expected to be around CNY 462 per megawatt-hour, a decrease of 3.14% year-on-year [11].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 24, indicating a potential upside of 29% from the current price of HKD 18.62 [3][6]. Core Insights - The company's performance in 2023 met expectations, with revenue of HKD 1,033 million, remaining stable year-on-year, and a net profit of HKD 110 million, representing a 56.2% increase. The renewable energy segment contributed HKD 97 million in profit, up 12.5%, while the thermal power segment turned a profit of HKD 36 million, recovering from a loss of HKD 619 million [2][3]. - The report highlights significant improvements in thermal power profitability due to increased coal imports and a substantial drop in coal prices, leading to a 12.6% decrease in fuel costs year-on-year. The introduction of capacity pricing policies in 2024 is expected to further stabilize thermal power profitability [2][3]. - The renewable energy segment is projected to be the main profit contributor, with 5.3 GW of new renewable energy capacity added in 2023 and a target of 10 GW for 2024. The report notes a 12.4% increase in wind power generation and a 111.8% increase in solar power generation, despite a slight decrease in solar utilization hours [2][3]. Summary by Sections Financial Performance - In 2023, the company achieved a revenue of HKD 1,033 million, with a net profit of HKD 110 million, marking a 56.2% increase from the previous year. The renewable energy segment's profit was HKD 97 million, while thermal power generated a profit of HKD 36 million [2][4]. - The projected net profits for 2024, 2025, and 2026 are HKD 144 million, HKD 162 million, and HKD 182 million, respectively, reflecting growth rates of 31%, 13%, and 13% [3][4]. Operational Highlights - The company added 5.3 GW of renewable energy capacity in 2023 and has a construction pipeline of 7.3 GW for wind and 6 GW for solar. The capital expenditure for 2024 is planned at HKD 59.9 billion, primarily for renewable energy projects [2][3]. - The report emphasizes the company's strong governance and operational efficiency, which have contributed to its improved financial performance and market position [3][4].

Investment Rating - The investment rating for China Resources Power (836.HK) is positive, suggesting investors should actively consider positioning in the stock [1][2]. Core Insights - China Resources Power reported a significant net profit increase of 56.2% year-on-year, aligning with market expectations. The total revenue remained stable at HKD 103.3 billion, while operating profit rose by 34.3% to HKD 18.2 billion [2]. - The company achieved a turnaround in its thermal power segment, contributing significantly to the overall profit growth. The segment's profit reached HKD 5.47 billion, with a revenue of HKD 80.1 billion [2]. - The company plans to accelerate renewable energy installations, targeting an additional 10GW in 2024 and aiming for a total of 40GW by the end of the 14th Five-Year Plan [1][2]. Financial Performance - In 2023, the company’s earnings per share (EPS) increased by 56.9% to HKD 2.29. The core business profit, excluding asset impairment losses, was HKD 13.3 billion, marking a 120% year-on-year growth [2]. - The company declared a total dividend payout ratio of 62% for its 20th anniversary, with a dividend yield of 7.5% [2]. - The operational installed capacity reached 77.3GW by the end of 2023, with thermal power accounting for 62.2% of the total capacity [2]. Future Outlook - For 2024, the company anticipates further improvement in the profitability of its thermal power segment, with a focus on long-term contracts and market coal procurement strategies [2]. - The capital expenditure for 2024 is projected at HKD 59.9 billion, a 34% increase from the previous year, primarily directed towards renewable energy projects [2]. - The stock is currently valued at a PE ratio of 6.0 times for 2024, with a forecasted net profit of HKD 14.4 billion, indicating potential for price appreciation [2].

Investment Rating - The investment rating for the company is "Outperform the Market" [6][18]. Core Views - The company is positioned as a leading player in the transition from coal to green energy, with a significant focus on renewable energy projects. The company aims to accelerate its renewable energy capacity, targeting 10 GW for 2024, up from 7 GW in 2023 [4][6]. - The company has a robust financial performance, with a notable increase in net profit of 56.2% year-on-year for 2023, reaching 11 billion HKD [2][8]. Summary by Relevant Sections Financial Performance - The company achieved a total revenue of 103.3 billion HKD in 2023, with a slight year-on-year increase of 0.03%. The net profit for the same year was 11 billion HKD, reflecting a year-on-year growth of 56.2% [2][7]. - The projected net profits for 2024, 2025, and 2026 are 14.3 billion HKD, 17.2 billion HKD, and 18.9 billion HKD respectively, indicating a strong growth trajectory [7][14]. Renewable Energy Development - The company has secured renewable energy development indicators for 19.5 million kW, with a focus on wind and solar energy projects. The actual installed capacity for renewable energy in 2023 was 7.68 million kW, exceeding the target of 7 million kW [4][6]. - The renewable energy segment generated a core profit of 9.73 billion HKD in 2023, with a projected increase to 16.5 billion HKD in 2024 [4][6]. Coal Power Operations - The company’s coal power assets are strategically located in economically developed regions, which enhances their operational efficiency. The average coal price in 2023 was 987.5 HKD per ton, down 12.6% year-on-year, which positively impacts profitability [6][12]. - The core profit from the coal power segment was 3.61 billion HKD in 2023, with expectations for further profit increases if coal prices continue to decline [6][12]. Valuation and Market Comparison - The company is valued at a price-to-earnings (P/E) ratio of 6.1 for 2024, with a projected reasonable value range between 20.86 and 26.82 HKD per share [6][13]. - Compared to peers, the company’s valuation metrics indicate a competitive position within the industry, with a P/B ratio of 1.0 [13][14].