Summary of China Resources Power's Conference Call Company Overview - **Company**: China Resources Power - **Year**: 2024 - **Revenue**: HKD 4 billion, up 28.5% year-on-year - **Core Profit from Renewable Energy**: HKD 9.23 billion, down 5.1% year-on-year, but still leading in the industry [2][3] Key Points Industry and Market Dynamics - **Renewable Energy Capacity**: As of the end of 2024, the company added 78 GW of renewable energy capacity, with a total of 47.2% of its installed capacity being renewable, an increase of 6.5 percentage points [2][4]. - **Electricity Sales**: Renewable energy sales volume increased by 19.2% to 52.23 billion kWh, accounting for 25.2% of total sales. Notably, solar sales surged by 141.5% [2][5]. - **Market Transaction Proportion**: The proportion of market-based transactions rose to 64%, an increase of 6.3 percentage points [2][5]. Financial Performance - **Shareholder Profit**: The profit attributable to shareholders was HKD 14.39 billion, a 30.82% increase year-on-year [3]. - **Coal Power Sales**: Coal-fired power sales volume increased by 4% to 155.4 billion kWh, with utilization hours exceeding the industry average by 225 hours [2][6]. - **Fuel Costs**: Expected fuel costs are projected to decrease by 7% to 8% year-on-year due to a balanced but loose coal market [2][12]. Future Plans and Investments - **Capital Expenditure**: Projected capital expenditure for 2025 is approximately HKD 56.8 billion, with HKD 42 billion allocated for renewable energy projects [2][7]. - **Coal Procurement**: Anticipated total coal procurement for 2025 is about 100.6 million tons, with over 80% contract coverage [2][12]. - **New Coal Power Units**: Plans to commission approximately 6 million kW of coal power capacity in 2025, primarily in Guangdong and Hubei [2][13]. Pricing and Profitability Trends - **Electricity Pricing**: Expected annual contract prices for 2025 are projected to decrease by about 7% compared to 2024, with southern provinces experiencing larger declines [2][9]. - **Market Price Trends**: Wind and solar prices fell by approximately 5% and 11% respectively in 2024, influenced by increased market transactions and the rise of parity projects [2][20]. - **Profitability Challenges**: The renewable energy sector faced profit declines due to reduced utilization hours, increased curtailment, and lower average electricity prices [2][21]. Strategic Initiatives - **A-Share Listing**: The company is actively pursuing the return of its renewable energy segment to the A-share market [2][35]. - **Energy Transition Focus**: Future development will focus on energy transition and security, optimizing installed capacity structure and reasonable growth [2][39]. - **Energy Storage Development**: The company is exploring energy storage technology applications, viewing it as a necessary trend for future development [2][40]. Additional Insights - **Dividend Policy**: The company plans to maintain a 40% dividend payout ratio [2][38]. - **Collaboration with Local Governments**: The company is shifting towards strategic partnerships with local energy enterprises to enhance project value [2][26]. - **Utilization Hours for Coal Power**: Expected to slightly decline in 2025, estimated between 4,000 to 4,450 hours due to increased competition from renewable sources [2][14]. This summary encapsulates the key insights from the conference call, highlighting the company's performance, market dynamics, future strategies, and challenges within the renewable energy sector.

Summary of China Resources Power's Conference Call Company Overview - **Company**: China Resources Power (华润电力) - **Date**: March 25, 2025 Key Financial Performance - **Net Profit**: For 2024, the net profit attributable to shareholders was HKD 14.39 billion, a year-on-year increase of 3% [3] - **Dividend**: Proposed final dividend of HKD 0.69 per share, maintaining a payout ratio of 40% [3] - **Core Profit from Nuclear Power**: Increased significantly to HKD 4.64 billion, up 28.5% year-on-year [3] - **Core Profit from Renewable Energy**: Decreased to HKD 9.23 billion, down 5.1% year-on-year due to various market factors [3] Renewable Energy Performance - **Installed Capacity**: Added 7.8 GW of renewable energy capacity in 2024, with a cumulative addition of over 21 GW by the end of 2024 [4] - **Renewable Energy Sales Volume**: Increased by 19.2% year-on-year, with significant growth in photovoltaic (PV) transmission volume, which surged by 141.5% [4] - **Market Share**: Renewable energy's share of total installed capacity rose to 47.2% by the end of 2024 [5] Pricing and Market Dynamics - **Average Utilization Hours**: Wind power utilization hours were 2,331 hours, exceeding the national average by 204 hours, while PV utilization hours were 1,415 hours [5] - **Average Selling Price**: Wind and PV average selling prices decreased by 5.3% and 10% respectively due to increased market trading [4][5] - **Market Trading Proportions**: Wind power market trading accounted for 36%, while PV market trading was 69% [4][13] Coal Power Performance - **Coal Power Sales Volume**: Increased by 4% year-on-year, with utilization hours exceeding the national average by 225 hours [6] - **Cost Control**: Average coal price decreased by 6.6%, and unit fuel cost fell by 6.8% [6] - **Financial Structure**: As of the end of 2024, the company had a debt ratio of 61%, with an EBITDA coverage cash ratio of 8.1 times [4][6] Future Outlook - **2025 Capacity Plans**: Plans to add 10 GW of new energy capacity, with a focus on wind power slightly exceeding PV [4][9] - **Cost Expectations**: Anticipated increase in coal power operating costs in the second half of 2025 due to rising interest and maintenance costs [21] - **Utilization Hours Forecast**: Expected decline in coal power utilization hours to 4,350-4,450 hours in 2025 due to rapid growth in renewable energy installations [22] Regulatory and Market Challenges - **Project Delays**: Renewable energy projects in central and southern regions face delays due to land and regulatory constraints [8][10] - **Long-term Contracts**: Approximately 70% of energy sales are under long-term contracts, which stabilize supply but may limit price flexibility [18] Additional Insights - **Green Energy Trading**: In 2024, green electricity trading volume was approximately 7 billion kWh, with a modest environmental premium [24] - **Subsidy Status**: The company received a total of CNY 21.6 billion in renewable energy subsidies, with CNY 7.4 billion added in 2024 [28] - **Debt Management**: The company plans to maintain its current level of perpetual bonds, which are crucial for financing [29] This summary encapsulates the key points from the conference call, highlighting the company's financial performance, renewable energy initiatives, market dynamics, and future outlook.

Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Insights - In 2024, the company's net profit reached HKD 14.388 billion, representing a year-on-year growth of 30.8% compared to HKD 11.003 billion in 2023 [5][2]. - The core business profit of the thermal power segment increased by 28.44% due to a steady decline in fuel costs, while the renewable energy segment saw a core business profit decrease of 5.11% [2][6]. - The company plans to expand its renewable energy capacity significantly, with a projected capital expenditure of HKD 56.8 billion in 2025, of which HKD 42 billion is allocated for renewable energy projects [6][2]. Summary by Sections Financial Performance - The thermal power sales volume increased by 4.00% in 2024, but the average on-grid electricity price for coal-fired power plants decreased by 2.7%, leading to a slight decline in sales revenue to HKD 71.901 billion, down 0.45% year-on-year [6][2]. - The average coal price for the company in 2024 was RMB 922.1 per ton, a decrease of 6.6% year-on-year, contributing to a 4.2% decline in fuel costs [6][2]. - The net profit from the thermal power business surged by 82.87% to HKD 5.221 billion, aided by the acquisition of the Guangxi Hezhou project, which generated a profit of HKD 0.876 billion [6][2]. Renewable Energy Segment - The company added 3.646 million kW of wind power and 4.142 million kW of solar power in 2024, with total wind power capacity reaching 24.313 million kW and solar power capacity reaching 9.433 million kW, marking year-on-year growth of 30.59% and 174.06%, respectively [6][2]. - Despite a decrease in average utilization hours for wind and solar power, the sales volume for wind and solar increased by 10.5% and 141.5%, respectively [6][2]. - The core business profit for renewable energy was HKD 9.228 billion, down 5.11%, but net profit increased by 11.72% to HKD 9.029 billion due to a significant reduction in impairment losses [6][2]. Dividend and Valuation - The company declared a total dividend of HKD 1.19 per share for 2024, with a payout ratio of 40%, resulting in a dividend yield of 6.26% based on the closing price on March 20 [2][6]. - Future earnings projections for 2025-2027 are estimated at HKD 14.020 billion, HKD 14.391 billion, and HKD 15.207 billion, with corresponding EPS of HKD 2.71, HKD 2.78, and HKD 2.94, and PE ratios of 7.02, 6.84, and 6.47, respectively [6][2].

Summary of China Resources Power Conference Call Company Overview - **Company**: China Resources Power (Ticker: 0836.HK) - **Industry**: Utilities in China - **Current Stock Price**: HK$18.88 (as of March 21, 2025) - **Market Capitalization**: HK$90,821 million - **Price Target**: HK$22.50, representing a 19% upside potential from the current price [6][6][6] Key Takeaways Power Tariff Insights - **New Energy Tariff**: Management anticipates that the provincial policy regarding the "mechanism tariff" for new energy will be announced in the second half of 2025, likely towards the end of the year. No significant changes in new energy tariffs are expected before this announcement [2][2][2] - **Thermal Power Tariff**: For 2025, approximately 69% of power generated from thermal sources will be sold at an annual tariff, 21% at a monthly tariff, and the spot market tariff is expected to be within 5-10%. The annual proportion is slightly lower compared to 2024 [3][3][3] Coal Price Expectations - Management expects the coal supply and demand balance in 2025 to remain stable or lean towards a looser market. If the spot coal price falls below approximately Rmb670, the long-term contract price is also expected to decrease further [4][4][4] New Energy Installation Targets - The company has set a target of 10GW for new energy installations in 2025, with 55% allocated to wind projects and 45% to solar projects. Management remains optimistic about the tariff-fuel cost spread for thermal power this year [9][9][9] Dividend Policy Considerations - Management will seriously consider its dividend policy following the company's spin-off, indicating potential changes in shareholder returns [9][9][9] Financial Performance and Projections - **Revenue Projections**: Expected revenue growth from HK$103,334 million in FY23 to HK$124,621 million by FY26 [6][6][6] - **EBITDA Growth**: Projected increase from HK$34,245 million in FY23 to HK$55,490 million by FY26 [6][6][6] - **Earnings Per Share (EPS)**: Expected to be HK$2.29 in FY23, rising to HK$3.45 by FY26 [6][6][6] Risks and Opportunities - **Upside Risks**: Decline in coal prices, better-than-expected power tariff policies, and increased wind capacity additions [12][12][12] - **Downside Risks**: Increase in coal prices, unfavorable power tariff policies, and lower-than-expected new wind capacity additions [12][12][12] Conclusion China Resources Power is positioned to navigate the evolving energy landscape with a focus on new energy installations and a cautious approach to tariff adjustments. The company's financial outlook remains positive, with significant growth projected in revenue and EBITDA over the next few years. The management's strategic considerations regarding dividends post-spin-off will be crucial for investor sentiment moving forward.

Summary of China Resources Power Conference Call Company Overview - **Company**: China Resources Power (CR Power) - **Ticker**: 0836.HK - **Industry**: Utilities in China Key Points Power Generation Performance - CR Power reported net power generation of **33,087 GWh** for January-February 2025, representing a **1% year-over-year increase**, outperforming China's total power output which declined by **1.3% YoY** [1][2] - The company's thermal power generation experienced a **3.0% YoY decline**, which is better than the national average decline of **5.8%** [1][2] Renewable Energy Growth - CR Power's wind power generation grew in line with the industry at approximately **10.5%**, while solar power generation surged by **48%** to **1,080 GWh**, significantly outpacing the industry growth of **27%** due to faster capacity additions from a low base [2][3] Market Conditions - Despite steady growth in industrial production and retail sales (4-6%), warm weather and early corporate shutdowns before the Chinese New Year were identified as primary factors for the decline in power output and consumption in China during the first two months of 2025 [3][4] - The forecast for China's power output is expected to maintain a growth rate of approximately **4%** for the year, with thermal power projected to increase by about **2%** [3] Financial Metrics and Valuation - CR Power's stock rating is **Overweight** with a price target of **HK$22.50**, indicating a **19% upside** from the current price of **HK$18.92** as of March 17, 2025 [10] - The company has a market capitalization of **HK$91,014 million** and an enterprise value of **HK$265,696 million** [10] - Projected revenue for 2025 is **HK$113,914 million**, with an EBITDA of **HK$47,127 million** [10] - The company’s P/E ratio is estimated at **6.8** for 2025, with a dividend yield of **5.9%** [10] Risks and Opportunities - **Upside Risks**: Decline in coal prices, favorable power tariff policies, and better-than-expected new wind capacity additions [12][13] - **Downside Risks**: Increase in coal prices, unfavorable power tariff policies, and lower-than-expected new wind capacity additions [12][13] Analyst Insights - Analysts emphasize the importance of dividend yield in the power sector, suggesting that the lowest yield acceptable by the market is around **5%** based on historical trends [12] Conclusion - CR Power is positioned favorably within the Chinese utilities sector, with strong growth in renewable energy and a solid financial outlook, despite facing challenges from macroeconomic factors and market conditions. The company’s strategic focus on expanding its renewable energy capacity could provide significant growth opportunities moving forward [10][12]

Financial Performance - The net profit attributable to the owners of the company for 2024 was HKD 14.39 billion, an increase of HKD 3.39 billion or 30.8% compared to HKD 11.00 billion in 2023[3]. - Basic earnings per share for 2024 were HKD 2.97, up 29.7% from HKD 2.29 in 2023[4]. - The operating profit for 2024 was HKD 23,224,531, up from HKD 18,198,396 in 2023, indicating a year-on-year increase of 27.9%[20]. - The total comprehensive income for the year ended December 31, 2024, was HKD 12,986,622, compared to HKD 10,048,346 in 2023, reflecting an increase of 29.4%[21]. - The profit attributable to the company's owners (excluding non-cash foreign exchange gains and losses) for 2024 is HKD 14.25 billion, compared to HKD 10.94 billion in 2023[46]. - Operating profit for 2024 was HKD 23.225 billion, an increase of HKD 5.027 billion or 27.6% compared to 2023, driven by lower coal prices and contributions from new projects[56]. - The proposed final dividend for 2024 is HKD 0.691 per share, up from HKD 0.587 per share in 2023[70]. Revenue and Costs - Total revenue for 2024 was HKD 105.28 billion, a slight increase from HKD 103.33 billion in 2023[7]. - The company's revenue for 2024 is HKD 105.28 billion, an increase of HKD 1.95 billion or 1.9% compared to HKD 103.33 billion in 2023[43]. - The total operating costs for 2024 are HKD 85.69 billion, a decrease of HKD 1.69 billion or 1.9% from HKD 87.38 billion in 2023[51]. - Fuel costs decreased by HKD 2.27 billion or 4.2% to HKD 52.24 billion in 2024, primarily due to a 6.6% drop in the average coal price[51]. - Employee benefits expenses rose by HKD 5.65 billion or 7.9% to HKD 7.75 billion in 2024, mainly due to new projects and acquisitions[52]. Assets and Liabilities - The total assets as of December 31, 2024, amounted to HKD 362,464,381, an increase from HKD 322,395,990 in 2023, showing a growth of 12.4%[23]. - The total liabilities as of December 31, 2024, were HKD 242,512,342, compared to HKD 217,848,849 in 2023, indicating an increase of 11.3%[25]. - The company's equity attributable to owners increased to HKD 99,151,499 in 2024 from HKD 84,973,689 in 2023, representing a rise of 16.7%[25]. - The net debt to total equity ratio stood at 153.6% as of December 31, 2024, slightly up from 153.1% in 2023[8]. Cash Flow and Investments - Operating cash flow for the year ended December 31, 2024, was HKD 33,695,005 thousand, an increase of 16.3% from HKD 28,869,278 thousand in 2023[26]. - Net cash outflow from investing activities was HKD 52,074,178 thousand in 2024, up from HKD 43,985,600 thousand in 2023, indicating an 18.8% increase[28]. - Cash inflow from financing activities amounted to HKD 20,404,028 thousand in 2024, compared to HKD 11,828,974 thousand in 2023, representing a significant increase of 72.5%[30]. - The company reported a decrease in impairment losses to HKD 578,760 thousand in 2024 from HKD 2,748,698 thousand in 2023, a reduction of 78.9%[26]. - Cash and cash equivalents at the end of 2024 were HKD 5,834,307 thousand, an increase from HKD 4,082,972 thousand at the end of 2023, reflecting a growth of 43.0%[30]. Business Segments and Capacity - The core profit contribution from renewable energy business was HKD 9.23 billion, compared to HKD 9.73 billion in 2023, while the core profit from thermal power business increased to HKD 4.64 billion from HKD 3.61 billion[4]. - The installed capacity managed by the group reached 82,441 MW by the end of 2024, with a net increase in renewable energy capacity of 7,788 MW during the year[9]. - The company operates two business segments: thermal power (including coal and gas power) and renewable energy (including wind, solar, and hydro power)[44]. - The company aims to add 10,000 MW of new wind and solar capacity by 2025, targeting a renewable energy capacity share of 50% by the end of the 14th Five-Year Plan[15]. Employee and Governance - As of December 31, 2024, the company employed 21,849 employees, a decrease from 22,203 in 2023[91]. - The company has complied with the corporate governance code, with a temporary vacancy in the president position from April 24, 2023, to December 15, 2024[94]. - The auditor's report for the financial statements for the year ended December 31, 2024, was unqualified, confirming consistency with the audited financial statements[95]. Future Outlook and Plans - The cash capital expenditure for 2025 is projected to be approximately HKD 56.8 billion, with around HKD 42 billion allocated for wind and solar power station construction[18]. - The company plans to commission a total coal-fired power generation capacity of 6,093 MW in 2025, including multiple projects across different regions[18]. - The group plans to optimize its capital structure through dividend payments, issuing new shares, and debt management strategies[74].

Investment Rating - The report maintains a "Buy" rating for China Resources Power (836 HK) with a target price adjusted to HKD 23.10, indicating a potential upside of 25.7% from the current price of HKD 18.38 [1][2][3]. Core Views - The company is expected to achieve a core profit growth of approximately 15.7% year-on-year in 2024, reaching HKD 12.7 billion. This growth is partly attributed to the increase in market trading volume and a decrease in the fire power price difference [2][7]. - The target price adjustment reflects a downward revision in profit forecasts for 2025 and 2026 by 22% and 21% respectively, due to anticipated limitations on wind and solar project utilization rates and average electricity prices [2][7]. - The report highlights that the current P/E ratio of 6.8 for 2025 is below the historical average, suggesting that the market has partially priced in uncertainties regarding electricity prices and utilization hours for 2025 [7]. Financial Forecasts - The updated financial forecasts for the company are as follows: - Revenue for 2024 is projected at HKD 104.132 billion, with a slight decrease in the forecast for 2025 to HKD 105.084 billion, reflecting a 6.8% reduction from previous estimates [6][15]. - Operating profit for 2024 is estimated at HKD 21.965 billion, with a decrease in 2025 to HKD 21.947 billion, indicating a 19.2% drop from prior forecasts [6][15]. - Net profit for 2024 is expected to be HKD 12.727 billion, with a forecasted decline to HKD 13.954 billion in 2025, representing a 21.9% reduction from earlier predictions [6][15]. Operational Metrics - The company’s installed capacity is projected to increase significantly, with total capacity expected to reach 68,507 MW by 2024 and 78,507 MW by 2025, with a growing share of renewable energy [8]. - The report anticipates that the proportion of renewable energy in the total installed capacity will rise from 48% in 2024 to 53% in 2025 [8]. Valuation - The valuation breakdown indicates that the thermal power segment is valued at HKD 16.837 billion, while the renewable energy segment is valued at HKD 102.778 billion, leading to a total valuation of HKD 119.6 billion [9].

Investment Rating - The report maintains a "Buy" rating for the company [3][7][13] Core Views - The company is expected to achieve a core profit growth of approximately 15.7% year-on-year in 2024, reaching HKD 12.7 billion [2][7] - The target price has been adjusted down to HKD 23.1, reflecting a potential upside of 25.7% from the current price [2][7][13] - The adjustments in profit forecasts for 2025 and 2026 are due to changes in wind and solar project utilization rates and average electricity prices, with profit estimates reduced by 22% and 21% respectively [2][7] Financial Performance - The company’s revenue for 2024 is projected at HKD 104.1 billion, with a slight decrease in operating profit estimates for 2025 and 2026 [6][15] - The expected net profit for 2024 is HKD 12.7 billion, with a net profit margin of 12.2% [6][15] - The company is projected to maintain a dividend payout ratio of 40%, with dividend yields of 5.3% and 5.9% for 2024 and 2025 respectively [7] Capacity and Sales Forecast - The total installed capacity is expected to increase from 68,507 MW in 2024 to 78,507 MW in 2025, with a significant rise in renewable energy capacity [8] - The total electricity sales volume is projected to grow from 207,638 GWh in 2024 to 223,796 GWh in 2025 [8] Valuation - The valuation of the thermal power segment is based on a 0.7x 2025E P/B ratio, while the renewable energy segment is valued at 8.0x 2025E P/E [9] - The total estimated value of the company is HKD 119.6 billion, translating to a per-share value of HKD 23.10 [9]

Investment Rating - The report maintains a "Buy" rating for the company [3][7][13] Core Views - The company is expected to achieve a core profit growth of approximately 15.7% year-on-year in 2024, reaching HKD 12.7 billion [2][7] - The target price has been adjusted down to HKD 23.1, reflecting a potential upside of 25.7% from the current price of HKD 18.38 [2][7][13] - The adjustments in profit forecasts for 2025 and 2026 are due to changes in wind and solar project utilization rates and average electricity prices, with profit estimates reduced by 22% and 21% respectively [2][7] Financial Performance Summary - The company’s revenue for 2024 is projected at HKD 104.1 billion, with a slight decrease in operating profit estimates for 2025 and 2026 [6][15] - The net profit for 2024 is expected to be HKD 12.7 billion, with a net profit margin of 12.2% [6][15] - The company is projected to maintain a dividend payout ratio of 40%, with dividend yields of 5.3% and 5.9% for 2024 and 2025 respectively [7] Capacity and Sales Forecast - The total installed capacity is expected to increase from 68,507 MW in 2024 to 78,507 MW in 2025, with a significant rise in renewable energy capacity [8] - The total electricity sales volume is projected to grow from 207,638 GWh in 2024 to 223,796 GWh in 2025 [8] Valuation Summary - The valuation for the thermal power segment is based on a 0.7x 2025E P/B ratio, while the renewable energy segment is valued at 8.0x 2025E P/E [9] - The total estimated value of the company is HKD 119.6 billion, translating to a per-share value of HKD 23.10 [9]

Investment Rating - The report maintains a "Buy" rating for China Resources Power (0836.HK) with a target price updated to HKD 23.6, indicating a potential upside of 31% from the current price of HKD 18 [6][11]. Core Views - The company experienced a 4.7% year-on-year decline in electricity sales in January 2025, primarily due to the impact of the Spring Festival. However, the overall electricity sales for 2024 are expected to grow by 7.4% year-on-year, indicating stable performance [3][4][9]. - The report highlights that the company's performance is supported by favorable coal and electricity price dynamics, with expectations of stable growth in profitability and operational performance [5][10]. - The report emphasizes the strength of the company's renewable energy assets, particularly wind power, which is expected to remain resilient amid market competition [5][10]. Summary by Sections Sales Performance - In January 2025, the company's electricity sales reached 18.02 million MWh, down 4.7% year-on-year, with thermal power sales declining by 11% and renewable energy sources like wind and solar showing significant growth [3][8]. - For the full year 2024, total electricity sales are projected to be 207.637 billion kWh, a 7.4% increase from the previous year, with notable growth in solar (141.5%) and hydro (15.2%) power sales [4][9]. Financial Outlook - The report projects stable revenue growth, with expected revenues of HKD 107.531 billion in 2025, reflecting a 2.6% increase from 2024 [7][15]. - The net profit attributable to shareholders is forecasted to reach HKD 16.221 billion in 2025, representing a 12.8% increase from 2024 [7][15]. Valuation Metrics - The updated target price of HKD 23.6 corresponds to a price-to-earnings (PE) ratio of 8x for 2024 and 7.5x for 2025, indicating a favorable valuation compared to industry peers [6][11].