Investment Rating - The report maintains a "Buy" rating for China Power (2380 HK) with a target price of HKD 4.56, indicating a potential upside of 22.9% from the current price of HKD 3.71 [4]. Core Views - The report highlights the restructuring of hydropower assets to an A-share listing platform, which is expected to enhance valuation. China Power plans to sell its hydropower assets (5.9 GW, approximately 60% stake) to its parent company, Guodian Investment, with the transaction expected to be detailed around October 18 [1][2]. - Management has outlined a preliminary plan to further integrate hydropower assets within three years, aiming to consolidate approximately 20 GW of remaining hydropower assets into the A-share platform [1]. - The transaction is viewed as a strategic move to leverage the higher valuations of hydropower assets in the A-share market, positioning China Power as a comprehensive clean energy flagship platform focusing on hydropower, wind, solar, and high-quality coal power [1][2]. Summary by Sections Hydropower Projects Overview - The report provides a detailed overview of China Power's hydropower projects, listing capacities and valuations in millions of RMB. The total capacity of the listed projects is 5,921 MW, with individual project valuations ranging from 59.9 million to 64.9 million RMB [2]. Valuation Metrics - The report outlines the valuation benchmarks for different segments of China Power's business, indicating a valuation of 0.75x the 2025 estimated price-to-book ratio for the hydropower segment. This is significantly lower than the approximately 3x price-to-book ratio of comparable companies [3]. - The report suggests that the hydropower segment's valuation could potentially increase to 1.5x or higher, which would enhance the overall valuation by approximately HKD 0.4-0.5 per share [1][3].

Investment Rating - The report maintains a "Buy" rating for China Power (2380.HK) and raises the target price to HKD 4.50, indicating a potential upside of 26% from the current price of HKD 3.58 [1][7]. Core Insights - The report highlights strong growth in wind and solar electricity sales, with total sales for the first eight months of 2024 reaching 87,773,648 MWh, a year-on-year increase of 31.24%. Wind and solar sales grew by 70.22% and 78.13% respectively [4][9]. - The thermal power segment also showed positive growth in August, benefiting from declining coal prices, with net profit for thermal power reaching RMB 1.108 billion, a year-on-year increase of 97.23% [5][10]. - Hydropower generation is expected to grow by approximately 80% for the full year, despite a slight decline in August sales [6][11]. - The report projects significant profit growth for the company, with net profit expected to reach RMB 4.944 billion in 2024, reflecting an 85.9% year-on-year increase [8][15]. Summary by Sections Financial Performance - For 2024, the company is projected to achieve revenues of RMB 51.673 billion, a 16.7% increase from the previous year, and net profit of RMB 4.944 billion, an 85.9% increase [8][15]. - The report indicates an EBITDA margin improvement, with expectations of 39% in 2024 [15]. Shareholder Information - Major shareholders include China Power International Co., Ltd. (22.91%), China Power Development Co., Ltd. (21.52%), and China Power (Renewable Energy) Holdings Ltd. (14.85%) [3]. Market Position - The company is positioned favorably within the industry, with a current market capitalization of HKD 443 billion and a total share capital of 12.4 billion shares [2][4].

[2024 Interim Performance Summary](index=4&type=section&id=%E4%BA%8C%E9%9B%B6%E4%BA%8C%E5%9B%9B%E5%B9%B4%E4%B8%AD%E6%9C%9F%E8%A1%A8%E7%8F%BE%E6%A6%82%E8%A6%81) During the reporting period, the company achieved strong performance growth, with profit attributable to equity holders increasing by 51.50% and total electricity sales by 33.33%, driven by significant clean energy generation 2024 H1 Key Financial and Operational Indicators | Indicator | 2024 H1 | 2023 H1 | YoY Growth | | :--- | :--- | :--- | :--- | | **Profit Attributable to Equity Holders of the Company** | RMB 2,802.2 million | RMB 1,849.7 million | +51.50% | | **Profit Attributable to Ordinary Equity Holders of the Company** | RMB 2,569.9 million | RMB 1,679.9 million | +52.98% | | **Total Electricity Sales** | 64,344,154 MWh | 48,259,373 MWh | +33.33% | | **Revenue** | RMB 26,471.5 million | RMB 21,317.0 million | +24.18% | | **Operating Profit** | RMB 7,466.3 million | RMB 4,478.4 million | +66.72% | | **Basic Earnings Per Share** | RMB 0.21 | RMB 0.14 | +50.00% | | **Consolidated Installed Capacity (Period-end)** | 48,327.8 MW | 32,941.2 MW | +46.71% | Electricity Sales by Generation Type (MWh) | Generation Type | 2024 H1 | 2023 H1 | YoY Growth | | :--- | :--- | :--- | :--- | | Hydropower | 10,675,021 | 5,622,929 | +89.85% | | Wind Power | 13,147,946 | 8,345,931 | +57.54% | | Photovoltaic Power | 11,830,577 | 6,015,399 | +96.67% | | Coal Power | 26,805,724 | 26,702,281 | +0.39% | | Gas Power | 977,038 | 951,592 | +2.67% | | Environmental Protection Power | 907,848 | 621,241 | +46.13% | | **Total** | **64,344,154** | **48,259,373** | **+33.33%** | Net Profit by Business Segment (RMB in thousands) | Business Segment | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Hydropower | 766,476 | (146,863) | | Wind Power | 1,960,215 | 1,453,360 | | Photovoltaic Power | 1,135,216 | 775,053 | | Thermal Power | 1,107,884 | 561,718 | | Energy Storage | 40,063 | 35,085 | | Unallocated | (418,091) | (128,782) | | **Total** | **4,591,763** | **2,549,571** | [Management Discussion and Analysis](index=6&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides a detailed analysis of the company's operational and financial performance during the period [Business Review](index=6&type=page&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) In the first half of 2024, the Group achieved strong performance growth, with profit attributable to ordinary equity holders reaching RMB 2.57 billion, a significant year-on-year increase, primarily driven by contributions from clean energy acquisitions, hydropower's turnaround due to increased rainfall, and enhanced profitability in thermal power from lower coal prices 2024 H1 Profit Performance | Indicator | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | **Profit Attributable to Ordinary Equity Holders of the Company** | RMB 2,569.9 million | RMB 1,679.9 million | | **Basic Earnings Per Share** | RMB 0.21 | RMB 0.14 | - Clean energy projects acquired in September 2023 contributed **RMB 628 million** in net profit during the reporting period, serving as a key driver for profit growth[13](index=13&type=chunk) [Installed Capacity](index=7&type=page&id=%E8%A3%9D%E6%A9%9F%E5%AE%B9%E9%87%8F) As of June 30, 2024, the Group's consolidated installed capacity significantly increased by 46.71% to 48,327.8 MW, with clean energy accounting for 77.07%, reflecting successful green transformation Consolidated Installed Capacity Details (MW) | Generation Type | 2024 June 30 | 2023 June 30 | YoY Growth | | :--- | :--- | :--- | :--- | | Hydropower | 5,951.1 | 5,451.1 | +9.17% | | Wind Power | 13,221.5 | 7,516.9 | +75.89% | | Photovoltaic Power | 17,253.0 | 8,221.0 | +109.86% | | Coal Power | 11,080.0 | 11,080.0 | 0.00% | | Gas Power | 505.2 | 475.2 | +6.31% | | Environmental Protection Power | 317.0 | 197.0 | +60.91% | | **Total** | **48,327.8** | **32,941.2** | **+46.71%** | - Consolidated installed capacity of clean energy (including hydropower, wind, photovoltaic, gas, and environmental protection power) reached **37,247.8 MW**, accounting for **77.07%** of total installed capacity, a significant year-on-year increase of **10.71 percentage points**[16](index=16&type=chunk) [Key Projects and Technological Innovation](index=8&type=page&id=%E9%87%8D%E9%BB%9E%E9%A0%85%E7%9B%AE%E5%8F%8A%E7%A7%91%E6%8A%80%E5%89%B5%E6%96%B0) The company successfully commissioned several large-scale clean energy projects, while its subsidiary Xinyuan Zhichu ranked highly in energy storage solutions and associate Qiyuan Xindongli expanded green power transportation services - The first and second phases of the Hubei multi-energy complementary million-kilowatt new energy base, totaling **700 MW** of installed capacity, have commenced full commercial operation[21](index=21&type=chunk) - The Xinjiang Artux **400 MW** photovoltaic power generation project, equipped with **100 MW / 400 MWh** energy storage facilities, has commenced full commercial operation[22](index=22&type=chunk) - Subsidiary Xinyuan Zhichu ranked **second nationwide** and **fourth globally** among "AC-side energy storage system solution" suppliers by shipment volume[25](index=25&type=chunk) - Associate Qiyuan Xindongli successfully launched its **first overseas charging and battery swapping business** in Indonesia and fully commissioned its first unmanned driving and electric heavy-duty truck project in a mining area in Xinjiang[28](index=28&type=chunk)[30](index=30&type=chunk) [Project Reserves](index=11&type=page&id=%E9%A0%85%E7%9B%AE%E5%84%B2%E5%82%99) The company maintains substantial clean energy project reserves, with 6,157.6 MW under construction and approximately 23,593 MW in early-stage development, all dedicated to clean energy - Consolidated installed capacity of projects under construction is **6,157.6 MW**, all of which are clean energy projects[32](index=32&type=chunk) - New development projects in the preliminary work stage total approximately **23,593 MW** of installed capacity, all clean energy projects, including large-scale projects like the **2,000 MW** offshore wind power project on Shandong Peninsula[33](index=33&type=chunk) [Power Generation and Sales Volume](index=12&type=page&id=%E7%99%BC%E9%9B%BB%E9%87%8F%E5%8F%8A%E5%94%AE%E9%9B%BB%E9%87%8F) In the first half of 2024, the Group's total electricity sales increased by 33.33% to 64,344,154 MWh, primarily driven by significant increases in hydropower, wind, and photovoltaic sales 2024 H1 Electricity Sales Overview | Generation Type | Electricity Sales (MWh) | YoY Growth | | :--- | :--- | :--- | | Hydropower | 10,675,021 | +89.85% | | Wind Power | 13,147,946 | +57.54% | | Photovoltaic Power | 11,830,577 | +96.67% | | Coal Power | 26,805,724 | +0.39% | | **Total** | **64,344,154** | **+33.33%** | - Total heat sales volume from subsidiaries increased by **39.47%** year-on-year, mainly due to intensified market development efforts and a significant increase in customer base[44](index=44&type=chunk) [Operational Metrics Analysis](index=15&type=page&id=%E9%81%8B%E7%87%9F%E6%8C%87%E6%A8%99%E5%88%86%E6%9E%90) Average on-grid tariffs for most power segments declined due to new grid-parity projects and lower fuel prices, while hydropower utilization hours significantly increased due to rainfall - Changes in average on-grid tariffs for various power segments: - **Hydropower**: **RMB 251.81/MWh**, a decrease of **RMB 11.84** - **Wind Power**: **RMB 446.62/MWh**, a decrease of **RMB 30.11** - **Photovoltaic Power**: **RMB 400.72/MWh**, a decrease of **RMB 17.92** - **Coal Power**: **RMB 392.16/MWh**, a decrease of **RMB 10.52**[48](index=48&type=chunk) - Changes in average utilization hours for power generating units: - **Hydropower**: **1,821 hours**, an increase of **775 hours** - **Wind Power**: **1,066 hours**, a decrease of **97 hours** - **Photovoltaic Power**: **738 hours**, a decrease of **31 hours** - **Coal Power**: **2,565 hours**, flat year-on-year[53](index=53&type=chunk) [Energy Storage Business](index=17&type=page&id=%E5%84%B2%E8%83%BD%E6%A5%AD%E5%8B%99) In the first half of 2024, the energy storage business saw a slight revenue decrease but achieved a 14.19% net profit increase through cost optimization, demonstrating strong profitability despite market competition 2024 H1 Energy Storage Business Performance | Indicator | Amount | YoY Change | | :--- | :--- | :--- | | **Revenue** | RMB 1,528.0 million | -6.05% (decrease of RMB 98.4 million) | | **Net Profit** | RMB 40.1 million | +14.19% (increase of RMB 5.0 million) | [Operating Performance Analysis](index=18&type=page&id=%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE%E5%88%86%E6%9E%90) The Group's net profit increased by 80.10% to RMB 4.59 billion, driven by higher clean energy sales and reduced fuel costs, despite an increase in finance costs due to acquisitions Net Profit by Operating Segment (RMB in thousands) | Operating Segment | 2024 H1 | 2023 H1 | Change | | :--- | :--- | :--- | :--- | | Hydropower | 766,476 | (146,863) | +621.90% | | Wind Power | 1,960,215 | 1,453,360 | +34.87% | | Photovoltaic Power | 1,135,216 | 775,053 | +46.47% | | Thermal Power | 1,107,884 | 561,718 | +97.23% | | **Total** | **4,591,763** | **2,549,571** | **+80.10%** | Revenue by Operating Segment (RMB in thousands) | Operating Segment | 2024 H1 | 2023 H1 | Change | | :--- | :--- | :--- | :--- | | Hydropower | 2,688,047 | 1,482,497 | +81.32% | | Wind Power | 5,872,111 | 3,978,786 | +47.59% | | Photovoltaic Power | 4,740,803 | 2,518,311 | +88.25% | | Thermal Power | 11,642,580 | 11,711,066 | -0.58% | | **Total** | **26,471,527** | **21,317,030** | **+24.18%** | - Total fuel costs decreased by **6.51%** year-on-year, primarily due to lower coal prices, with the average unit fuel cost for coal power business decreasing by **8.01%** to **RMB 274 yuan/MWh**[61](index=61&type=chunk)[64](index=64&type=chunk) - To celebrate its 20th listing anniversary, the Board resolved to declare a special dividend of **RMB 0.05 yuan** per share[76](index=76&type=chunk) [Financial Position and Liquidity](index=22&type=page&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%88%87%E6%B5%81%E5%8B%95%E6%80%A7) As of June 30, 2024, total assets increased to RMB 325.58 billion, with a stable gearing ratio of approximately 64%, and operating cash flow significantly improved, supported by diversified financing Key Financial Position Indicators (RMB in thousands) | Indicator | 2024 June 30 | 2023 December 31 | | :--- | :--- | :--- | | **Total Assets** | 325,580,796 | 305,806,779 | | **Total Debt** | 183,097,639 | 168,714,840 | | **Cash and Cash Equivalents** | 6,263,294 | 5,738,815 | | **Current Ratio** | 0.58 | 0.61 | | **Gearing Ratio** | Approx. 64% | Approx. 63% | - Cash flow changes in the first half: - **Net cash generated from operating activities**: **RMB 5.42 billion** (vs. RMB 3.25 billion in prior period), due to a significant increase in operating profit[83](index=83&type=chunk) - **Net cash used in investing activities**: **RMB 14.06 billion** (vs. RMB 7.53 billion in prior period), due to increased payments for acquisitions and project construction[83](index=83&type=chunk) - **Net cash generated from financing activities**: **RMB 9.16 billion** (vs. RMB 8.18 billion in prior period)[83](index=83&type=chunk) - Successfully issued corporate bonds totaling **RMB 3.0 billion** and green medium-term notes totaling **RMB 3.5 billion** during the period, used to repay existing borrowings[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) [Policies and Risk Management](index=25&type=page&id=%E6%94%BF%E7%AD%96%E8%88%87%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The company actively monitors national energy policies that support clean energy development and maintains a comprehensive risk management framework to address foreign exchange, funding, and policy change risks - National policies emphasize increasing the share of non-fossil energy installed capacity to approximately **55%** and accelerating the construction of large-scale wind and solar bases, which benefits the company's clean energy business development[95](index=95&type=chunk)[97](index=97&type=chunk) - The Group has established a systematic risk management mechanism, covering governance, management, and internal audit, with a Risk Management Committee and a Strategy and Sustainable Development Committee[101](index=101&type=chunk) - Key risks include: - **Foreign Exchange Risk**: Over **99%** of debt is RMB-denominated, with foreign currency borrowings accounting for only **0.49%**, making the risk controllable[102](index=102&type=chunk) - **Funding Risk**: Managed through diversified financing and cooperation with SPIC Finance, with **RMB 45.25 billion** in undrawn credit facilities[106](index=106&type=chunk) - **Policy Change Risk**: Addressed by strengthening market analysis and optimizing power generation structure to cope with electricity price competition from new energy marketization[107](index=107&type=chunk) [Social and Environmental Governance](index=28&type=page&id=%E7%A4%BE%E6%9C%83%E8%88%87%E7%92%B0%E5%A2%83%E7%AE%A1%E6%B2%BB) The Group upholds high ESG standards, achieving zero major safety incidents, increasing its workforce, actively addressing climate change through TCFD, and maintaining strict pollutant emission controls - No major incidents related to employees, equipment, or environmental protection occurred in the first half, and all operating power plants complied with local safety production regulations[108](index=108&type=chunk)[111](index=111&type=chunk) - As of June 30, 2024, the Group employed **14,241** full-time employees, an increase from **10,636** in the same period last year[113](index=113&type=chunk) - The Group highly values ESG work, has established a Strategy and Sustainable Development Committee, and successfully joined the United Nations Global Compact (UNGC) The company has identified and analyzed climate risks and opportunities in accordance with the TCFD framework[117](index=117&type=chunk)[118](index=118&type=chunk) - The coal consumption rate for power supply in the first half was **299.60 g/kWh**, and the operation rates of desulfurization and denitrification units were both **100%**, maintaining low pollutant emission performance across all indicators[120](index=120&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) [Outlook and Special Dividend](index=32&type=section&id=%E5%B1%95%E6%9C%9B%E5%8F%8A%E7%89%B9%E5%88%A5%E8%82%A1%E6%81%AF) The company aims for high-quality transformation to become a world-class clean energy supplier and declared a special dividend to celebrate its 20th listing anniversary and reward shareholders [Outlook](index=32&type=page&id=%E5%89%8D%E6%99%AF%E5%B1%95%E6%9C%9B) The company will continue to pursue high-quality transformation, focusing on optimizing existing assets, developing new projects, and securing future growth to become a world-class clean energy supplier - The company will continue to adhere to the main theme of "improving existing assets, optimizing new increments, and building momentum for the future," fully promoting high-quality transformation and development, ensuring energy and power security, and fostering new productive forces[125](index=125&type=chunk) [Special Dividend](index=33&type=page&id=%E7%89%B9%E5%88%A5%E8%82%A1%E6%81%AF) To commemorate its 20th listing anniversary, the Board resolved to declare a special cash dividend of RMB 0.05 per ordinary share to acknowledge long-term shareholder support Special Dividend Details | Item | Date | | :--- | :--- | | **Dividend Per Share** | RMB 0.05 (HKD 0.0547) | | **Ex-dividend Date** | September 30, 2024 | | **Record Date** | October 4, 2024 | | **Payment Date** | October 15, 2024 | [Corporate Governance](index=34&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The company maintains high corporate governance standards, complying with the Corporate Governance Code, strengthening risk management and internal controls, and enhancing investor relations [Risk Management and Internal Control](index=34&type=page&id=%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86%E5%8F%8A%E5%85%A7%E9%83%A8%E7%9B%A3%E6%8E%A7) During the reporting period, the company enhanced its risk management and internal control systems through comprehensive internal audits, targeted risk prevention, and optimized post-investment evaluations - During the period, **fifteen audit projects** were organized, and the "Digital Intelligence Audit System" was promoted to improve the quality and efficiency of audit work[134](index=134&type=chunk) - "One enterprise, one policy" major risk prevention and control checklists were formulated, and a job risk management manual was issued, closely integrating risk prevention and control with job responsibilities[136](index=136&type=chunk) [Share Option Incentive Scheme](index=36&type=page&id=%E8%82%A1%E6%AC%8A%E6%BF%80%E5%8B%B5%E8%A8%88%E5%8A%83) As of June 30, 2024, 60,360,300 share options remained under the 2022 scheme, with RMB 11.52 million in share-based payment expenses recognized during the period Share Option Incentive Scheme Changes | Item | Number of Share Options | | :--- | :--- | | **As of January 1, 2024** | 93,060,000 | | **Expired during the period** | (32,699,700) | | **As of June 30, 2024** | 60,360,300 | - During the reporting period, the company recognized share-based payment expenses of **RMB 11.52 million** (2023 corresponding period: RMB 21.14 million)[91](index=91&type=chunk) [Independent Review Report](index=41&type=section&id=%E7%8D%A8%E7%AB%8B%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) Ernst & Young, the independent auditor, conducted a review of the interim condensed consolidated financial information and found no material non-compliance with HKAS 34 - Independent auditor Ernst & Young issued an **unmodified conclusion** on the interim financial information[160](index=160&type=chunk) [Interim Condensed Consolidated Financial Statements](index=42&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E8%A6%81%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2024, including the statements of profit or loss, comprehensive income, financial position, changes in equity, and cash flows [Interim Condensed Consolidated Statement of Profit or Loss](index=42&type=page&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E8%A6%81%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) The statement of profit or loss shows the Group's revenue of RMB 26.47 billion, operating profit of RMB 7.47 billion, and profit for the period of RMB 4.59 billion, all significantly increased year-on-year [Interim Condensed Consolidated Statement of Comprehensive Income](index=43&type=page&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E8%A6%81%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The statement of comprehensive income includes profit for the period and other comprehensive income items, with total comprehensive income for the period amounting to RMB 5.01 billion [Interim Condensed Consolidated Statement of Financial Position](index=44&type=page&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E8%A6%81%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) The statement of financial position shows total assets of RMB 325.58 billion, total liabilities of RMB 225.31 billion, and total equity of RMB 100.27 billion as of June 30, 2024 [Interim Condensed Consolidated Statement of Changes in Equity](index=46&type=page&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E8%A6%81%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) The statement of changes in equity details movements in equity items, including share capital, reserves, and retained profits, reflecting the impact of profit, dividends, and non-controlling interests [Interim Condensed Consolidated Statement of Cash Flows](index=48&type=page&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E8%A6%81%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) The statement of cash flows indicates net cash generated from operating activities of RMB 5.42 billion, net cash used in investing activities of RMB 14.06 billion, and net cash generated from financing activities of RMB 9.16 billion [Notes to the Interim Condensed Consolidated Financial Information](index=49&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E8%A6%81%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) This section provides detailed explanations and supplementary information for the interim condensed consolidated financial statements, covering accounting policies, segment information, revenue, related party transactions, financial instruments, and capital commitments

Investment Rating - The report does not specify a clear investment rating for the company [4]. Core Insights - The company reported a significant increase in mid-year performance for 2024, with a revenue growth of 24.2% to RMB 26.47 billion and a net profit increase of 53.0% to RMB 2.57 billion [2][3]. - The company declared a special dividend of RMB 0.05 per share to celebrate its 20th anniversary [1][2]. - The clean energy segment continues to be a major driver of profit growth, with wind and solar profits increasing by 35% and 46% respectively [2]. - The company aims to increase its clean energy capacity to over 78% by the end of 2024, with a target of 90% by the end of the 14th Five-Year Plan [1][2]. Summary by Sections Financial Performance - The company achieved a significant operating profit growth of 66.7% to RMB 7.47 billion in the first half of 2024 [2]. - The hydropower segment turned profitable with a profit increase of 622%, driven by improved rainfall and operational efficiency [2][3]. - The thermal power segment saw a profit increase of 97% due to a decrease in coal procurement prices, with average fuel costs down by 8% [3]. Clean Energy Development - The company added 3.3 GW of self-built wind and solar capacity in the first half of 2024, bringing the total clean energy capacity to 77% of its total installed capacity [2]. - The company plans to add an additional 7 GW of clean energy capacity by the end of 2024 [1][2]. Shareholder Returns - The company maintains a dividend payout ratio of over 50%, with an expected annual dividend yield exceeding 7% [2][3]. - The special dividend of RMB 0.05 per share is part of the company's commitment to shareholder returns [1][2].

Investment Rating - The report maintains an "Outperform" rating for the company [4] Core Views - The company has shown comprehensive performance recovery, with a special dividend of 0.05 CNY per share, totaling 620 million CNY, marking its 20th anniversary [4] - The company reported a revenue of 26.47 billion CNY for the first half of 2024, a year-on-year increase of 24.2%, and a net profit of 4.59 billion CNY, up 80.1% year-on-year [4] - The hydropower segment achieved a net profit of 770 million CNY in 24H1, with a significant increase in electricity sales volume by 90% year-on-year [4] Summary by Sections Hydropower - In 24H1, the hydropower segment recorded a net profit of 770 million CNY, with a profit per kWh of 0.072 CNY, compared to a loss of 150 million CNY in 23H1 [4] - The increase in profit is attributed to improved water inflow, with utilization hours rising by 775 hours year-on-year to 1821 hours [4] Thermal Power - The thermal power segment achieved a net profit of 1.11 billion CNY in 24H1, with a profit per kWh of 0.039 CNY, compared to 560 million CNY in 23H1 [4] - The decrease in fuel costs contributed to the performance, with unit fuel costs dropping to 0.274 CNY per kWh from 0.298 CNY per kWh in 23H1 [4] Renewable Energy - The wind power segment reported a net profit of 1.96 billion CNY in 24H1, with a profit per kWh of 0.149 CNY, while the solar power segment achieved a net profit of 1.14 billion CNY [4] - The sales volume for wind and solar power increased by 57.5% and 96.7% year-on-year, respectively [4] Earnings Forecast and Valuation - The company is expected to achieve a net profit of 5.12 billion CNY in 2024, with earnings per share projected at 0.41 CNY [4] - The report suggests a valuation premium due to the recovery in thermal power profitability and quality asset injections, with a target price range of 4.05 to 4.96 HKD based on a PE ratio of 9-11 for 2024 [4]

Investment Rating - The report maintains a **Buy** rating for China Power (2380 HK) with a target price of HKD 4.56, implying a potential upside of 27.4% from the current price of HKD 3.58 [1][2] Core Views - **Strong H2 Profit Growth**: The company is expected to deliver robust profit growth in the second half of the year, driven by significant improvements in the hydro power segment and a special dividend announcement [1] - **Hydro Power Recovery**: Hydro power operating profit surged 5.3x YoY to RMB 1.35 billion in H1 2024, exceeding expectations by 25%, due to improved water conditions [1] - **Wind and Solar Growth**: Despite a decline in utilization hours for wind (-8%) and solar (-4%) in H1, operating profits for wind and solar increased by 35% and 63% respectively, supported by new capacity additions [1] - **Coal Power Margin Expansion**: The coal power segment saw a 44% YoY increase in operating profit, driven by a higher spark spread (RMB 0.118/kWh vs. RMB 0.105/kWh in H1 2023) due to lower coal costs [1] - **Special Dividend**: A special dividend of RMB 0.05 per share was announced to celebrate the company's 20th anniversary of listing in Hong Kong [1] Financial Performance and Forecasts - **H1 2024 Earnings**: Net profit rose 53% YoY to RMB 2.57 billion, slightly above expectations by 2% [1] - **2024/25 Profit Growth**: Profit growth is forecasted at 69% and 39% for 2024 and 2025 respectively, despite downward revisions of 2.5% and 6.0% due to lower wind and solar utilization hours [2] - **Dividend Yield**: The company's dividend yield for 2024/25 is expected to exceed 7%, with a payout ratio of 65% or higher, including the special dividend [2] Capacity and Generation Outlook - **Hydro Power**: Hydro utilization hours are expected to remain at historically high levels, with a 10% upward revision in hydro generation forecast for 2024, leading to a 57% YoY increase in hydro power output [1] - **Wind and Solar**: The company maintains its 2024 target of adding 3GW of wind and 4GW of solar capacity, despite a 5% and 2% downward revision in wind and solar generation forecasts due to lower wind speeds and solar irradiance [1] - **Total Capacity**: By 2026, the company's total installed capacity is projected to reach 67,019 MW, with renewable energy accounting for 83.5% of the total [7] Valuation - **Sum-of-the-Parts Valuation**: The target price of HKD 4.56 is derived from a sum-of-the-parts valuation, with hydro, wind, and solar segments valued at 0.75x, 8.5x, and 8.5x 2025E P/B and P/E multiples respectively [8] Industry Comparison - **Peer Comparison**: Among covered companies in the renewable energy sector, China Power (2380 HK) has a 27.4% potential upside, compared to peers like Huadian Power (836 HK) with 23.5% and Longyuan Power (916 HK) with 37.2% [9]

Investment Rating - The report maintains a "Buy" rating for China Power (02380) [1] Core Views - The company reported a significant increase in revenue and net profit for the first half of 2024, with revenue reaching RMB 26.47 billion, up 24.18% year-on-year, and net profit attributable to shareholders at RMB 2.57 billion, up 52.98% year-on-year [3][4] - The company plans to distribute a special dividend of RMB 0.05 per share, totaling approximately RMB 619 million, which represents 24.1% of the net profit for the first half of 2024 [3] Performance Summary - The company's net profit for H1 2024 increased by 53.0%, with profits from thermal, wind, and solar power segments showing substantial growth of 97.2%, 34.9%, and 46.5% respectively [4] - The hydropower segment turned profitable with a net profit of RMB 770 million in H1 2024, compared to a loss of RMB 150 million in H1 2023, driven by an 89.85% increase in hydropower sales volume [4] - The decline in coal prices positively impacted the thermal power segment, leading to a significant profit increase [4] - The company added 3.3 GW of new clean energy capacity in H1 2024, contributing to the growth in wind and solar power profits [4] Financial Forecasts - The report projects revenues of RMB 49.39 billion, RMB 53.40 billion, and RMB 58.02 billion for 2024, 2025, and 2026 respectively, with corresponding net profits of RMB 5.01 billion, RMB 5.96 billion, and RMB 6.66 billion [7][8] - The expected P/E ratios for the years 2024, 2025, and 2026 are 8, 6.8, and 6.08 respectively, indicating a favorable valuation outlook [8]

Investment Rating - The report maintains a "Buy" rating for the company [5][6] Core Views - The company reported a significant increase in revenue and profit for the first half of 2024, driven by improved water inflow and lower coal prices [5] - The company is positioned as a flagship platform for the State Power Investment Corporation, benefiting from the group's high-quality asset support [6] - Current valuation is considered to be in a deep value range, with institutional investors showing increased interest in the company's shares [6] Summary by Sections Financial Performance - For the first half of 2024, the company achieved revenue of 26.472 billion RMB, a year-on-year increase of 24.18%, and a profit attributable to equity holders of 2.802 billion RMB, up 51.5% [5] - The company announced a special dividend of 0.05 RMB per share, reflecting its strong financial performance [5] Operational Highlights - The company’s installed capacity reached 48.33 million kW by June 2024, with a 77.07% share of clean energy [5] - The company sold 64.3 billion kWh in the first half of 2024, with significant year-on-year increases in hydropower, wind, and solar energy sales [5] Valuation and Forecast - The report adjusts the company's net profit forecasts for 2024-2026 to 4.81 billion, 5.66 billion, and 6.41 billion RMB respectively, with corresponding PE ratios of 8, 7, and 6 [6] - The company commits to a dividend payout ratio of no less than 50% of net profit, resulting in a combined dividend yield of 7.7% when including the special dividend [6]

[Financial Summary and Performance Highlights](index=1&type=section&id=Financial%20Summary) [Financial Summary](index=1&type=section&id=Financial%20Summary) The Group reported RMB 26.47 billion in revenue and RMB 4.59 billion in profit for the period, with strong growth in power generation, electricity sales, and basic earnings per share Key Financial Indicators for H1 2024 | Indicator | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue (Thousand Yuan) | 26,471,527 | 21,317,030 | +24.18% | | Profit for the Period (Thousand Yuan) | 4,591,763 | 2,549,571 | +80.10% | | Profit Attributable to Equity Holders of the Group (Thousand Yuan) | 2,802,197 | 1,849,653 | +51.50% | | Basic Earnings Per Share (Yuan) | 0.21 | 0.14 | +50.00% | | Total Power Generation (MWh) | 66,842,047 | 50,442,852 | +32.51% | | Total Electricity Sales (MWh) | 64,344,154 | 48,259,373 | +33.33% | [Performance Highlights](index=1&type=section&id=Performance%20Highlights) Profit growth was driven by all segments, with clean energy, hydropower (turning profitable), and thermal power (due to lower coal costs) showing significant increases - Clean energy generation is a key driver of profit growth, with **wind power** and **photovoltaic power** segments' profits increasing by **34.87%** and **46.47%** year-on-year, respectively[5](index=5&type=chunk) - The **hydropower** segment turned losses into profits due to abundant rainfall, with profit significantly increasing by **621.90%** year-on-year[5](index=5&type=chunk) - The **thermal power** segment's profit increased by **97.23%** year-on-year due to reduced fuel costs from lower average coal procurement prices[5](index=5&type=chunk) [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) Revenue reached RMB 26.47 billion, with operating profit surging 66.7% to RMB 7.47 billion and profit for the period increasing 80.1% to RMB 4.59 billion Summary of Consolidated Statement of Profit or Loss | Indicator | H1 2024 (RMB Thousand) | H1 2023 (RMB Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 26,471,527 | 21,317,030 | +24.2% | | Fuel Costs | (7,922,234) | (8,473,766) | -6.5% | | Operating Profit | 7,466,308 | 4,478,416 | +66.7% | | Profit Before Tax | 5,468,812 | 2,979,659 | +83.5% | | Profit for the Period | 4,591,763 | 2,549,571 | +80.1% | | Profit Attributable to Ordinary Equity Holders of the Company | 2,569,879 | 1,679,854 | +53.0% | [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the period significantly increased to RMB 5.01 billion, driven by strong profit growth and fair value gains on equity instruments - Total comprehensive income for the period was **RMB 5,009,325 thousand**, a year-on-year increase of **82.8%**, primarily due to the strong growth in profit for the period[7](index=7&type=chunk) - Other comprehensive income was **RMB 417,562 thousand**, a year-on-year increase of **119.3%**, mainly from increased fair value gains on equity instruments at fair value through other comprehensive income[7](index=7&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, total assets grew to RMB 325.58 billion, total liabilities to RMB 225.31 billion, and total equity to RMB 100.27 billion, reflecting business expansion Summary of Statement of Financial Position | Indicator | As of June 30, 2024 (RMB Thousand) | As of December 31, 2023 (RMB Thousand) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 325,580,796 | 305,806,779 | +6.5% | | Total Liabilities | 225,309,682 | 210,786,067 | +6.9% | | Total Equity | 100,271,114 | 95,020,712 | +5.5% | - Non-current assets increased from **RMB 260.16 billion** to **RMB 272.75 billion**, primarily driven by an increase in property, plant and equipment[9](index=9&type=chunk) - Net current liabilities expanded from **RMB 29.53 billion** to **RMB 33.83 billion**, indicating increased liquidity pressure[11](index=11&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Net cash from operating activities increased to RMB 5.42 billion, while investing activities used RMB 14.06 billion, and financing activities generated RMB 9.16 billion, leading to a net cash increase of RMB 0.53 billion Summary of Cash Flow Statement | Indicator | H1 2024 (RMB Thousand) | H1 2023 (RMB Thousand) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 5,422,743 | 3,248,977 | | Net Cash Used in Investing Activities | (14,055,098) | (7,526,899) | | Net Cash Generated from Financing Activities | 9,160,067 | 8,183,082 | | Net Increase in Cash and Cash Equivalents | 527,712 | 3,905,160 | [Notes to the Interim Condensed Consolidated Financial Information](index=9&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [Revenue and Segment Information](index=10&type=section&id=3%20Revenue%20and%20Segment%20Information) Electricity sales to grid companies account for 94% of revenue; thermal power is the largest revenue source, while wind and PV power show rapid revenue and profit growth, collectively contributing over RMB 3 billion in profit H1 2024 Revenue by Segment (RMB Thousand) | Segment | Revenue | Year-on-Year Change | | :--- | :--- | :--- | | Thermal Power | 11,642,580 | -0.6% | | Hydropower | 2,688,047 | +81.3% | | Wind Power | 5,872,111 | +47.6% | | Photovoltaic Power | 4,740,803 | +88.3% | | Energy Storage | 1,527,986 | -6.1% | H1 2024 Profit for the Period by Segment (RMB Thousand) | Segment | Profit for the Period | Year-on-Year Change | | :--- | :--- | :--- | | Thermal Power | 1,107,884 | +97.2% | | Hydropower | 766,476 | +621.9% (Turned Loss to Profit) | | Wind Power | 1,960,215 | +34.9% | | Photovoltaic Power | 1,135,216 | +46.5% | | Energy Storage | 40,063 | +14.2% | [Dividends](index=20&type=section&id=11%20Dividends) The Board resolved not to declare an interim dividend for H1 2024 but declared a special dividend post-period to celebrate the 20th listing anniversary - The Board resolved not to declare an interim dividend for the six months ended **June 30, 2024**[57](index=57&type=chunk) - On **August 22, 2024**, the Board resolved to declare a special dividend of **RMB 0.05 per ordinary share**[80](index=80&type=chunk) [Assets Held for Sale](index=22&type=section&id=13%20Assets%20and%20Liabilities%20Classified%20as%20Held%20for%20Sale) The Company plans to sell its 11% equity in Pingwei Power Generation, classifying related assets (RMB 3.8 billion) and liabilities (RMB 2.19 billion) as held for sale - The Company intends to sell an **11% equity interest** in Anhui Huainan Pingwei Power Generation Co., Ltd., with related assets and liabilities classified as held for sale[66](index=66&type=chunk) Assets and Liabilities Held for Sale (RMB Thousand) | Item | Amount | | :--- | :--- | | Assets Classified as Held for Sale | 3,802,048 | | Liabilities Classified as Held for Sale | 2,187,532 | [Business Review and Outlook](index=29&type=section&id=Business%20Review%20and%20Outlook) [Operating Performance Overview](index=29&type=section&id=Operating%20Performance%20Overview) H1 2024 saw strong performance driven by economic recovery and electricity consumption growth, with clean energy assets contributing significantly and profit attributable to ordinary equity holders increasing 53.0% - Clean energy companies acquired in **September 2023** contributed net profit of **RMB 628 million** during the reporting period[82](index=82&type=chunk) - As of **June 30, 2024**, the Group's consolidated installed capacity was **48,327.8 MW**, with clean energy accounting for **77.07%**, a significant year-on-year increase of **10.71 percentage points**[84](index=84&type=chunk) - Profit attributable to ordinary equity holders of the Company was **RMB 2,569,879,000**, a year-on-year increase of **53.0%**; basic earnings per share was **RMB 0.21**[83](index=83&type=chunk) [Business Segment Performance](index=31&type=section&id=Business%20Segment%20Performance) Total electricity sales grew 33.33%, with hydropower, wind, and PV power sales surging over 50%; clean energy on-grid tariffs declined due to grid-parity projects, while energy storage profit grew despite revenue decline H1 2024 Electricity Sales Volume | Category | Electricity Sales (MWh) | Year-on-Year Change | | :--- | :--- | :--- | | Total Electricity Sales | 64,344,154 | +33.33% | | Hydropower | 10,675,021 | +89.85% | | Wind Power | 13,147,946 | +57.54% | | Photovoltaic Power | 11,830,577 | +96.67% | | Coal Power | 26,805,724 | +0.39% | - Average on-grid tariffs for **wind power** and **photovoltaic power** decreased to **RMB 446.62/MWh** and **RMB 400.72/MWh**, respectively, mainly due to the commissioning or integration of grid-parity projects[97](index=97&type=chunk)[98](index=98&type=chunk) - Energy storage business revenue decreased by **6.1%** year-on-year, but net profit increased by **14.19%** year-on-year, mainly due to cost control and optimized procurement models[99](index=99&type=chunk)[100](index=100&type=chunk) [Financial Position Analysis](index=36&type=section&id=Financial%20Position%20Analysis) The Group maintains a stable financial position with 24.18% revenue growth, controlled operating costs, increased finance costs due to expansion, a 64% gearing ratio, and ample undrawn financing facilities - The average unit fuel cost for **thermal power** business was **RMB 274/MWh**, a year-on-year decrease of **8.01%**, mainly due to lower coal prices and optimized procurement structure[107](index=107&type=chunk) - Finance costs increased by **29.63%** year-on-year to **RMB 2.58 billion**, primarily due to increased borrowings from clean energy acquisitions in the second half of last year[114](index=114&type=chunk) - As of **June 30, 2024**, the gearing ratio (net debt/total capital) was approximately **64%**, remaining stable. The Group had undrawn financing facilities of **RMB 45.25 billion**[125](index=125&type=chunk)[138](index=138&type=chunk) - Capital expenditure in the first half was **RMB 11.50 billion**, with approximately **85% (RMB 9.78 billion)** invested in the clean energy segment[132](index=132&type=chunk) [Outlook](index=44&type=section&id=Outlook) The Group aims to become a "world-class clean energy supplier" by optimizing assets, ensuring energy security, and fostering new productive forces, further demonstrating confidence with a special dividend for its 20th listing anniversary - The Group will continue to promote high-quality transformation and development, striving to become a **"world-class clean energy supplier"**[146](index=146&type=chunk) - To celebrate its **20th listing anniversary**, the Board declared a special dividend of **RMB 0.05 per ordinary share** to thank shareholders and demonstrate confidence in the future[146](index=146&type=chunk)[147](index=147&type=chunk) [Other Corporate Information](index=45&type=section&id=Other%20Corporate%20Information) [Corporate Governance](index=45&type=section&id=Corporate%20Governance) The Company maintains high corporate governance standards, complying with the Corporate Governance Code and its internal model code for directors' securities transactions - For the six months ended **June 30, 2024**, the Company complied with all applicable provisions of the Corporate Governance Code[152](index=152&type=chunk) - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[149](index=149&type=chunk)

Investment Rating - The report suggests a positive outlook for the company, indicating a strong performance in electricity sales and recommending close attention to the company's diverse power generation portfolio [4]. Core Insights - The company reported a significant increase in total electricity sales for July 2024, with a year-on-year growth of 29.22%, and a cumulative increase of 32.65% for the first seven months of 2024 [2][4]. - Hydropower sales saw a remarkable year-on-year increase of 197.44% in July, while wind power and solar power also experienced substantial growth of 51.35% and 88.05%, respectively [4]. - The report highlights that despite a decline in coal-fired power generation by 16.31%, the overall performance of the company remains strong due to the growth in renewable energy sources [4]. Summary by Category Electricity Sales Performance - Total electricity sales for July 2024 reached 12,243,061 MWh, up from 9,474,895 MWh in July 2023, marking a 29.22% increase [3]. - For the first seven months of 2024, total electricity sales amounted to 76,587,215 MWh, compared to 57,734,268 MWh in the same period of 2023, reflecting a 32.65% increase [3]. Generation by Type - Hydropower generation in July 2024 was 2,693,092 MWh, a 197.44% increase from 905,415 MWh in July 2023 [3]. - Wind power generation reached 2,221,998 MWh in July 2024, up 51.35% from 1,468,106 MWh in July 2023 [3]. - Solar power generation was 2,277,473 MWh in July 2024, an increase of 88.05% from 1,211,096 MWh in July 2023 [3]. - Coal-fired power generation decreased to 4,687,710 MWh in July 2024, down 16.31% from 5,601,084 MWh in July 2023 [3].