Summary of Conference Call Company and Industry Overview - The conference call primarily discusses the performance and strategic plans of a power generation company, focusing on its renewable energy segment, including wind and solar power, as well as traditional coal-fired power generation. Key Points and Arguments Power Generation Performance - From January to September, the company's total electricity generation increased by 7.8% year-on-year, with wind power generation up by 12.1% and coal power generation up by 4% [1][2]. - The company aims to install 40 GW of new renewable energy capacity during the 14th Five-Year Plan, with a target of 10 GW for this year and an expected increase to 16.5 GW next year [2][3]. Capital Expenditure and Financial Strategy - The total capital expenditure (CAPEX) for the year is projected at approximately 599 billion yuan, with over 70% allocated to support renewable energy development [1][2]. - The company is actively optimizing its capital structure and exploring various financing channels, including green loans and bond issuance, to support its growth [3][4]. - The company has a cash reserve of nearly 10 billion yuan, indicating a strong liquidity position [1][4]. Electricity Pricing Trends - The average electricity price in the third quarter remained stable, with some regions experiencing significant increases due to seasonal demand [5][6]. - Current trends indicate that electricity prices may decline in October due to lower temperatures and increased renewable energy generation [5][6]. - The company anticipates that electricity prices will stabilize as the market adjusts to seasonal changes and supply-demand dynamics [6][7]. Future Outlook and Strategic Initiatives - The company is preparing for its 2025 business plan, focusing on increasing renewable energy capacity and maintaining a healthy capital structure [2][3]. - There is an ongoing discussion about the potential for an IPO of its renewable energy subsidiary, which is seen as a strategic move to enhance shareholder value [4][18]. - The company emphasizes the importance of balancing business growth with shareholder returns, maintaining a minimum dividend payout ratio of 40% [4][10]. Regulatory and Market Environment - The company is closely monitoring regulatory developments and market conditions, particularly regarding the renewable energy sector and electricity pricing policies [4][18]. - There is a recognition of the need for a transition towards more market-driven electricity pricing, especially for renewable energy sources [9][10]. Additional Considerations - The company is exploring acquisition opportunities in the renewable energy sector, focusing on friendly targets that meet internal criteria [7][8]. - The impact of coal prices on electricity pricing and profitability remains a critical area of focus, with expectations of continued fluctuations based on market conditions [12][13][14]. Conclusion - The company is positioned for growth in the renewable energy sector while maintaining a focus on financial health and shareholder returns. The strategic initiatives discussed during the call reflect a proactive approach to navigating the evolving energy market landscape.

Investment Rating - The report maintains a "Buy" rating for China Resources Power (836 HK) with a target price adjusted to HKD 25.02, reflecting a potential upside of 20.6% from the current price of HKD 20.75 [1][2]. Core Insights - The company has successfully raised HKD 7.2 billion through a share issuance, with 46% of the new shares subscribed by its parent company, China Resources Group, indicating strong support and confidence in the company [1]. - The new share issuance is expected to cover a significant portion of the capital expenditures for 2024 and 2025, with anticipated new installations of 8 GW and 9 GW of wind and solar capacity, respectively [1]. - The net debt-to-equity ratio is projected to decrease by 15 percentage points to 138% in 2024, further reducing to 130% in 2025, which will enhance the company's financial stability [1]. Financial Summary - Revenue projections for the years 2024 to 2026 are as follows: HKD 104,166 million (2024E), HKD 112,798 million (2025E), and HKD 121,494 million (2026E), with a modest growth rate of 0.8% in 2024 and 8.3% in 2025 [2][13]. - Net profit is expected to rise significantly from HKD 11,333 million in 2023 to HKD 14,782 million in 2024, reflecting a year-on-year growth of 9.4% [2][13]. - The earnings per share (EPS) forecast for 2024 is adjusted to HKD 2.50, down from a previous estimate of HKD 2.68, due to share dilution effects from the new issuance [2][13]. Capacity and Sales Forecast - The total installed capacity is projected to increase from 68,507 MW in 2024 to 78,507 MW in 2025, with renewable energy sources accounting for 48% of the total capacity in 2024 and increasing to 53% in 2025 [3]. - The total electricity sales are expected to grow from 207,618 GWh in 2024 to 227,041 GWh in 2025, driven by increased generation from both wind and solar power [3]. Valuation - The report employs a sum-of-the-parts valuation method, estimating the value of the thermal power segment at HKD 18,014 million and the renewable energy segment at HKD 111,497 million, leading to a total valuation of HKD 129,511 million [4].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 29.95 [6][7]. Core Views - The company plans to issue 198.5 million new shares to alleviate funding pressure, which will increase the total share capital by 7.62% [3]. - The issuance price is set at HKD 19.70 per share, representing a discount of approximately 5.06% compared to the latest closing price [3]. - The net proceeds from the fundraising are expected to be HKD 71.97 billion, aimed at increasing cash reserves, supporting operations, and repaying financial liabilities [3]. - The company’s debt-to-asset ratio as of 1H24 stands at 68.1%, an increase of 8.9 percentage points since the end of 2020 [5]. - The company has achieved 33.56% of its renewable energy development target for the "14th Five-Year Plan" with a total installed capacity of 24.66 million kilowatts as of 1H24 [5]. Summary by Sections Financial Projections - The forecasted net profit attributable to the parent company for 2024-2026 is projected at HKD 14.99 billion, HKD 16.61 billion, and HKD 19.46 billion respectively, reflecting growth rates of 36.21%, 10.84%, and 17.12% [9][14]. - The expected earnings per share (EPS) for the same period is projected to be HKD 3.12, HKD 3.45, and HKD 4.04 [9][14]. Valuation Metrics - The report assigns a price-to-book (PB) ratio of 0.85 for thermal power and 17.5 for renewable energy, reflecting a premium due to the company's superior profitability in these sectors [6][12]. - The target market capitalization is estimated at HKD 144.1 billion, with a target price of HKD 29.95, which does not yet account for the potential increase in total share capital from the new issuance [6][12]. Shareholder Structure - Following the completion of the share issuance, the public shareholders' stake in the company will increase from 37.06% to 39.55% [4]. - The combined stake of China Resources Group and its concert parties will decrease to 61.73% post-issuance [4]. Market Context - The report highlights the ongoing challenges in the renewable energy sector, particularly the delay in the planned spin-off of the renewable energy platform for A-share listing, which is crucial for funding the company's ambitious growth targets [5]. - The company’s stock has shown a 52-week price range of HKD 14.00 to HKD 25.45, indicating significant volatility [8].

Financial Position and Ratios - The Group's cash and cash equivalents as of 30 June 2024 included HK$48 million, BDT0.7306 million, USD0.4691 million, and a small amount of GBP, with bank and other borrowings of HK$4,967 million and EUR1.17 million[175] - The Group's net debt to equity ratio is calculated based on borrowings, cash, and cash equivalents, with a focus on RMB-denominated assets and liabilities[173] - The Group's quick ratio is determined by the balance of current assets minus inventories, divided by current liabilities at the end of the period[173] - The Group's EBITDA interest coverage ratio is calculated using profit before tax, interest expenses, depreciation, and amortization, excluding non-cash income and expenses[173] Foreign Exchange Risk - The Group faces foreign exchange risk due to different functional currencies within the Group, with potential impacts from RMB appreciation or depreciation against HKD and USD[173] - The Group's foreign exchange risk mainly arises from RMB-denominated borrowings, with some entities having HKD as their functional currency[173] Revenue and Expenditures - The Group's revenue is primarily collected in RMB, with most expenditures also denominated in RMB, including operational and capital expenditures[173] Employee Compensation - The Group had 20,779 employees as of 30 June 2024, with compensation mainly consisting of salaries and performance-based bonuses[177] Subsequent Events and Litigations - The Group had no significant subsequent events after the financial period ended, and no provisions were made for pending litigations and claims as of 30 June 2024[176] Financial Statements Review - The Group's condensed consolidated financial statements for the six-month period ended 30 June 2024 were reviewed in accordance with Hong Kong Standard on Review Engagements 2410[180]

Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1] Core Insights - The company reported a revenue of 51.1 billion HKD for the first half of 2024, a year-over-year decrease of 0.7%, while the net profit attributable to shareholders was 9.36 billion HKD, reflecting a year-over-year increase of 38.9% [4] - The core profit from thermal power was 2.72 billion HKD, significantly up from 730 million HKD in the same period last year, driven by a decrease in coal prices and fuel costs [4] - Renewable energy core profit was 5.56 billion HKD, down from 5.95 billion HKD year-over-year, attributed to lower revenue from renewable energy due to unfavorable weather conditions [4] - The company plans to add 40 million kW of renewable energy capacity during the 14th Five-Year Plan period, with a target of 10 million kW in 2024 [4] Financial Performance - The company expects net profits of 15 billion HKD, 17.2 billion HKD, and 18.8 billion HKD for 2024, 2025, and 2026 respectively, with earnings per share projected at 3.13 HKD, 3.57 HKD, and 3.90 HKD [5][9] - The estimated price-to-earnings (PE) ratio for 2024 is between 7-9 times, suggesting a fair value range of 21.91 to 28.17 HKD per share [5] - The company’s revenue is projected to grow slightly from 104.38 billion HKD in 2023 to 104.77 billion HKD in 2024, with a compound annual growth rate of approximately 4.9% through 2026 [6][9] Market Comparison - The company’s current PE ratio is 6.5, which is lower than its peers, indicating a potentially undervalued position in the market [8] - The average PE for comparable companies is around 8.4, suggesting that the company may have room for valuation improvement [8]

Investment Rating - The report assigns a recommendation for investors to accumulate shares during price dips, indicating a positive outlook for the company [1]. Core Insights - The company reported a significant net profit increase of 38.9% year-on-year for the first half of 2024, driven primarily by improved profitability in its thermal power segment due to lower coal prices [1]. - The renewable energy segment is expected to accelerate its capacity installation, targeting an additional 10GW in 2024, contributing to the company's long-term growth strategy [1]. - The current valuation corresponds to a PE ratio of 6.0 for 2024, with a projected dividend yield of 6.5%, suggesting potential for share price appreciation [1]. Summary by Sections Financial Performance - For 2024H1, the company achieved a net profit of HKD 93.6 billion, with total revenue remaining stable at HKD 511.2 billion and operating profit increasing by 26.4% to HKD 132.7 billion [1]. - The core business net profit, excluding certain one-time items, grew by 23.8% to HKD 82.7 billion, with earnings per share (EPS) rising by 39.3% to HKD 1.95 [1]. Thermal Power Segment - The thermal power segment's revenue slightly decreased by 2.8% to HKD 379.7 billion, but core profit surged by 274% to HKD 27.1 billion due to a 10.6% drop in benchmark coal prices [1]. - The average on-grid electricity price for coal power fell by 3% to RMB 416.7/MWh, while the unit fuel cost decreased by 10.7% to RMB 276.5/MWh [1]. Renewable Energy Segment - The renewable energy segment's revenue increased by 5.8% to HKD 131.5 billion, but core profit declined by 6.7% to HKD 55.6 billion due to a decrease in wind resource availability [1]. - Wind power sales volume rose by 6.9% to 224 billion kWh, but the utilization hours dropped by 9.5% to 1223 hours [1]. - The company aims to achieve a total of 40GW of new renewable energy installations by the end of the 14th Five-Year Plan [1]. Future Outlook - The company plans to accelerate renewable energy installations, with a target of 10GW for 2024 and a total operational capacity of 80.3GW by mid-2024 [1]. - The anticipated net profit for 2024 is projected to reach HKD 146.7 billion, maintaining a dividend payout ratio of 40% [1].

证 券 研 究 报 告 华润电力（0836.HK） 2024-09-16 星期一 | --- | --- | |------------|--------------| | | | | 目标价： | 24 港元 | | 现 价： | 18.52 港元 | | 预计升幅 : | 30% | | --- | --- | |---------------------|--------------------------| | | | | 日期 | 2024-09-13 | | 收盘价（港元） | 18.52 | | 总股本（百万股） | 4,810 | | 总市值（亿港元） | 891 | | 净资产（百万港元） | 110,617 | | 总资产（百万港元） | 346,778 | | 52 周高低（港元） | 24.88/12.91 | | 每股净资产（港元） | 18.81 | | 数据来源： Wind | 、国元证券经纪（香港）整 | 理 主要股东 华润集团（电力）有限公司（62.93%） 相关报告 深度报告-20210608 更新报告-20220124 更新报告-20220322 投资要点 ➢ 煤价下行， ...

Investment Rating - Maintains an **OUTPERFORM** rating with a target price of **HK$25.55**, representing a potential upside from the current price of **HK$18.52** [3] - The stock is valued at **6x PE** for 2024, reflecting confidence in the company's earnings growth [5] Core Views - **Thermal power profitability** significantly improved in H1 2024, with core profits surging **273.9% YoY** to **HKD 2.715 billion**, driven by lower fuel costs and reduced impairments [4][5] - **Renewable energy business** faced profit pressure, with core profits declining **6.7% YoY** to **HKD 5.556 billion**, despite a **5.8% YoY revenue growth**, due to lower utilization hours and electricity prices [5][12] - The company's **ROE** reached **10.7%**, above the 10-year historical average, supported by strong thermal power performance and reduced impairments [4] Financial Performance - **Revenue** remained stable at **HKD 51.12 billion** in H1 2024, while **net profit** surged **38.9% YoY** to **HKD 9.363 billion**, driven by thermal power profitability [4] - **Thermal power revenue** declined **3.3% YoY** to **HKD 33.6 billion**, but **core profits** surged due to a **10.7% YoY decline in average fuel costs** [5] - **Renewable energy revenue** grew **5.8% YoY** to **HKD 13.152 billion**, but profits were pressured by lower utilization hours and electricity prices [12] Strategic Developments - The company continues to advance its **new energy strategy**, with **24.7GW** of renewable energy capacity, accounting for **39.3%** of total installed capacity [5] - **Wind power** capacity reached **19.12GW**, with sales volume increasing **6.9% YoY**, while **photovoltaic sales volume** surged **204.9% YoY** [12] Valuation and Forecasts - The company is expected to achieve **net profits** of **HKD 14.47 billion**, **HKD 16.504 billion**, and **HKD 18.724 billion** for 2024, 2025, and 2026, respectively, driven by thermal power recovery and new energy contributions [5] - **Diluted EPS** is forecasted to grow from **HKD 3.01** in 2024 to **HKD 3.89** in 2026, reflecting strong earnings growth [4]

证券研究报告 公用事业|电力 证券分析师 查浩 S1350524060004 zhahao@huayuanstock.com 刘晓宁 S1350523120003 liuxiaoning@huayuanstock.com 邹佩轩 S1350524070004 zoupeixuan01@huayuanstock.com 邓思平 S1350524070003 dengsiping@huayuanstock.com 市场表现： 2024 年 09 月 11 日 华润电力 (0836.HK) 买入（维持） ——业绩再超预期 优质治理能力持续验证 投资要点： ➢ 事件：公司发布 2024 年中期业绩。上半年公司权益持有人应占利润为 93.63 亿港元，同比增 长 38.91%；权益持有人应占核心利润为 82.71 亿港元，同比增长 23.81%。 ➢ 风况略差拖累新能源业绩，但是新能源电价稳定性超过预期。公司上半年新增投产风电和光伏 权益装机容量分别 0.50GW 和 1.56GW，截至 2024 年 6 月底，公司风电在运权益装机容量 19.12GW，在建 7.53GW；光伏在运权益装机容量 5GW，在建 8.01G ...

Investment Rating - The investment rating for China Resources Power (0836.HK) is "Buy" (maintained) [2] Core Views - The company reported a mid-year profit attributable to equity holders of HKD 9.363 billion, a year-on-year increase of 38.91%, and a core profit of HKD 8.271 billion, up 23.81% year-on-year [2] - Despite slightly adverse wind conditions affecting renewable energy performance, the stability of renewable energy prices exceeded expectations [2] - The company plans to add 10GW of new renewable energy capacity in 2024, with a total capital expenditure of HKD 59.9 billion, of which HKD 44.6 billion is allocated for wind and solar power station construction [3] - The coal power segment's performance improved due to declining coal prices, with core profit for coal power reaching HKD 2.715 billion, a significant increase of 274% year-on-year [2] Summary by Sections Financial Performance - For the first half of 2024, the company achieved a profit attributable to equity holders of HKD 9.363 billion, a 38.91% increase year-on-year, and a core profit of HKD 8.271 billion, up 23.81% year-on-year [2] - The average on-grid electricity price for wind power decreased by 1.9% year-on-year, but the price stability was better than the industry average [2] - The company’s coal power generation increased by 3.4% year-on-year, with the benchmark coal price down by 10.6% [2] Capacity Expansion and Strategy - The company aims to add 10GW of new renewable energy capacity in 2024, continuing its commitment to a cleaner energy transition [3] - The company’s renewable energy segment achieved a core profit of HKD 5.556 billion in the first half of 2024, a decrease of 6.68% year-on-year, but still better than the average performance in the green energy sector [2][3] Earnings Forecast and Valuation - The forecast for net profit attributable to equity holders for 2024-2026 is HKD 14.223 billion, HKD 16.055 billion, and HKD 18.283 billion respectively, with corresponding PE ratios of 7, 6, and 5 times [3][5] - The company’s revenue for 2024 is projected to be HKD 103.334 billion, with a year-on-year growth rate of 8.87% [5]