Investment Rating - The investment rating for the company is maintained, with a 2025 PE of 8.1 times [6][9]. Core Viewpoints - The company reported better-than-expected performance, with a 7% year-on-year revenue increase to 2.44 billion RMB in 2024, driven by the contribution from newly acquired photovoltaic power stations [2][6]. - Despite the revenue growth, net profit decreased by 12% year-on-year to 790 million RMB due to power restrictions and declining electricity prices [2][6]. - The company plans to distribute a final dividend of 2.7 HKD cents per share, resulting in a payout ratio of 49% and a dividend yield of approximately 5.1% [2][6]. Summary by Sections Financial Performance - In 2024, the company's revenue increased to 2.44 billion RMB, primarily due to the contribution from 636.5 MW and 860 MW photovoltaic power stations acquired in 2023 and 2024, respectively [2][6]. - The gross margin decreased from 67.9% to 65.6%, and the net margin fell from 39.5% to 32.4% [2][6]. - The company’s net profit for 2024 was 790 million RMB, reflecting a 12% decline compared to the previous year [2][6]. Project Portfolio - The company mainly holds grid-parity projects, which are less affected by subsidies. By the end of 2024, it operated 46 large solar power stations with a total installed capacity of 4,510.5 MW, of which 2,776.5 MW (61.6%) are grid-parity projects [3][6]. - The company has a project reserve of 1.2 GW from its parent company, with 890 MW being grid-parity projects, indicating potential for future acquisitions [3][6]. Financial Management - The company has improved its financial management, with the proportion of RMB-denominated loans increasing to 80% and financial costs decreasing to 3.5% in 2024, down from 6.1% in 2023 [4][6]. - The management's efforts in loan restructuring and dividend distribution have been noted as impressive [4][6]. Market Outlook - The outlook for 2025 suggests potential improvements in the impact of power restrictions and electricity price declines, particularly in regions with high electricity demand such as Anhui and Hubei [5][6]. - The company is also expanding into overseas markets, with plans to commence construction on a 100 MW photovoltaic power station in Malaysia within the year [5][6].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company is expected to achieve a total revenue of 2,440 million RMB in 2024, representing a year-on-year growth of 7.0%, primarily driven by new photovoltaic project acquisitions [5][6] - The net profit attributable to shareholders is projected to be 791 million RMB in 2024, reflecting a decline of 12.1% year-on-year due to increased withholding tax from subsidiary dividends [5][6] - The company has a strong cash flow position, with operating cash flow expected to grow by 42% year-on-year to 960 million RMB in 2024 [5][6] - The company plans to distribute a total dividend of 5 HKD per share for 2024, a decrease of 17% compared to the previous year [5][6] Financial Performance Summary - **Revenue Forecast**: - 2024: 2,440 million RMB (7.0% growth) - 2025E: 2,533 million RMB (3.8% growth) - 2026E: 2,569 million RMB (1.4% growth) - 2027E: 2,699 million RMB (5.1% growth) [4] - **Net Profit Forecast**: - 2024: 791 million RMB (-12.1% growth) - 2025E: 861 million RMB (8.9% growth) - 2026E: 903 million RMB (4.8% growth) - 2027E: 984 million RMB (9.0% growth) [4] - **Return on Equity (ROE)**: - 2024: 6.3% - 2025E: 6.6% - 2026E: 6.7% - 2027E: 6.8% [4] - **Earnings Per Share (EPS)**: - 2024: 0.10 RMB - 2025E: 0.10 RMB - 2026E: 0.11 RMB - 2027E: 0.12 RMB [4] - **Dividend Yield**: - 2024: 5.0% - 2025E: 5.5% - 2026E: 5.9% - 2027E: 6.5% [4] Operational Highlights - The company added 860 MW of new installed capacity in 2024, bringing the total installed capacity to 4,510.5 MW, with 62% of this being grid-parity projects [5][9] - The total electricity sales volume is expected to increase by 13.8% year-on-year to 4.35 billion kWh in 2024 [12] - The company has a stable subsidy recovery situation, with 4.8 billion RMB in subsidies expected to be recovered in 2024, which is consistent with the previous year [12]

Investment Rating - The report assigns a "Buy" rating to the company, with a target price of HKD 1.17, indicating a potential upside of 46.3% from the current price of HKD 0.80 [1][4][12]. Core Insights - The company's core performance for 2024 is expected to exceed expectations, driven by a significant increase in electricity sales volume in the second half of the year, with a projected sales volume growth of 17% to 4,472 GWh [2][7]. - The new electricity pricing policy is anticipated to stabilize the prices of existing projects, reducing uncertainty in profitability [7]. - The company is transitioning its debt from HKD to RMB, resulting in a significant decrease in financing costs, with an expected average borrowing rate of below 3% by 2025 [7]. - The report forecasts a moderate growth in dividends per share from 2025 to 2027, with an attractive current dividend yield of 7.7% [7]. Financial Overview - Revenue is projected to grow from RMB 2,435 million in 2023 to RMB 2,606 million in 2024, reflecting a year-on-year increase of 7% [3][15]. - Net profit is expected to decline from RMB 993 million in 2023 to RMB 858 million in 2024, a decrease of 12% [3][15]. - The company’s earnings per share (EPS) is forecasted to be RMB 0.10 in 2024, with a recovery to RMB 0.12 in 2025 [3][15]. - The price-to-earnings (P/E) ratio is projected to be 7.9x in 2024, decreasing to 6.5x in 2025 [3][15]. Key Business Metrics - The company plans to add 860 MW of new capacity in 2024, with total installed capacity expected to reach 4,555 MW [9]. - The average electricity price is projected to decline from RMB 0.67 per kWh in 2023 to RMB 0.61 per kWh in 2024 [9]. - The gross margin is expected to decrease from 67.9% in 2023 to 65.6% in 2024, with a slight recovery anticipated in subsequent years [9].

Investment Rating - The report assigns a "Buy" rating for the company, with a target price of HKD 1.17, indicating a potential upside of 46.3% from the current price of HKD 0.80 [1][4][12]. Core Insights - The company's core performance for 2024 is expected to exceed expectations, driven by a significant increase in electricity sales volume in the second half of the year, with a projected sales volume growth of 17% to 4,472 GWh [2][7]. - The new electricity pricing policy is anticipated to stabilize the prices of existing projects, reducing uncertainty in profitability [7]. - The company is transitioning its debt from HKD to RMB, resulting in a significant decrease in financing costs, with the average borrowing rate expected to drop to below 3% by 2025 [7]. - The report forecasts a moderate growth in dividends per share from 2025 to 2027, with an attractive current dividend yield of 7.7% [7]. Financial Overview - Revenue is projected to grow from RMB 2,435 million in 2023 to RMB 2,606 million in 2024, reflecting a year-on-year growth of 7% [3][15]. - Net profit is expected to decline from RMB 993 million in 2023 to RMB 858 million in 2024, a decrease of 12% [3][15]. - The company’s earnings per share (EPS) is forecasted to be RMB 0.10 in 2024, with a recovery to RMB 0.12 in 2025 [3][15]. - The price-to-earnings (P/E) ratio is projected to be 7.9 in 2024, decreasing to 6.5 in 2025 [3][15]. Key Business Metrics - The company plans to add 860 MW of new capacity in 2024, with total installed capacity expected to reach 4,555 MW [9]. - The average on-grid electricity price is projected to decline from RMB 0.67 in 2023 to RMB 0.61 in 2024 [9]. - The gross margin is expected to decrease from 67.9% in 2023 to 65.6% in 2024, with a slight recovery anticipated in subsequent years [9][16].

Summary of Xinyi Energy Conference Call Company Overview - **Company**: Xinyi Energy - **Year**: 2024 - **Revenue**: CNY 3.99 billion, a decrease of 12% year-on-year, primarily due to electricity price adjustments [2][3] Key Points Financial Performance - **Electricity Sales**: Increased by 17% year-on-year, reaching 4.7 billion kWh, equivalent to a reduction of 3.67 million tons of CO2 emissions [3] - **Net Profit**: Approximately CNY 790 million, a decrease of 12% year-on-year [3] - **Operating Capacity**: 46 large ground power stations with a total approved capacity of 4.5 GW, of which 62% are grid-parity projects [2][3] - **Cash Flow**: Operating cash flow improved significantly from CNY 670 million in 2023 to CNY 950 million in 2024 [5] Financial Management Adjustments - Transitioned a significant amount of Hong Kong dollar loans to domestic long-term loans, reducing the effective interest rate from 6% at the end of 2023 to 3.5% by the end of 2024 [7][8] - Anticipated significant reduction in interest expenses in 2025 due to this financial restructuring [8] Policy and Market Dynamics - The new electricity reform policy has minimal impact on existing projects but requires further evaluation for new projects once provincial details are clarified [6] - The decline in costs for photovoltaic components and energy storage solutions may facilitate smoother output curves, but the specific impact will depend on provincial policy implementation [2][6] - Market-based trading ratio increased from 12% in 2023 to 37%-38% in 2024, though this had a limited impact on electricity prices [21] Subsidy and Project Development - Of the 4.5 GW projects, 1.7 GW are eligible for subsidies, with 1 GW already on the national subsidy compliance list [4] - The company is interested in acquiring a 890 MW grid-parity project from Xinyi Solar, pending provincial policy clarity [4][19] - Plans to expand into overseas markets, including a joint venture for a 100 MW project in Malaysia, which is expected to boost photovoltaic demand due to upcoming price increases [4][27] Future Outlook - Anticipated electricity price adjustments in 2025, with improvements expected in provinces like Hubei due to favorable policy changes [24][25] - The company does not have rigid development or acquisition requirements, focusing instead on projects that provide reasonable returns for shareholders [9] - Future investments in energy storage systems will depend on market conditions and the economic viability of such projects [12][13] Challenges and Considerations - The company faces challenges related to electricity consumption and supply, with a projected electricity consumption growth rate exceeding GDP growth [5] - The impact of electricity price adjustments on subsidy projects has led to fluctuations in revenue from these projects [14] Conclusion - Xinyi Energy is navigating a complex landscape of policy changes, market dynamics, and financial restructuring, with a focus on sustainable growth and strategic investments in both domestic and international markets. The company remains optimistic about future opportunities in the renewable energy sector, particularly in light of evolving policies and market conditions.

Investment Rating - The report maintains a "Buy" rating for the company [9][13]. Core Views - The company achieved a revenue of 2.44 billion RMB in 2024, a year-on-year increase of 7.0%, while net profit decreased by 12.0% to 791 million RMB [2]. - The proportion of grid parity projects increased to 61.6%, with a total power station capacity of 4.5 GW, enhancing cash flow stability [3]. - The company expects financing rates to continue declining, with the actual interest rate dropping to 3.5%, a decrease of 1.2 percentage points year-on-year [4]. Summary by Sections Performance Overview - Revenue for 2024 was 2.44 billion RMB, up 7.0% year-on-year, while net profit was 791 million RMB, down 12.0% [2]. - The company declared a final dividend of 0.027 HKD per share [2]. Operational Analysis - The share of grid parity projects rose by 8.8 percentage points year-on-year to 61.6%, with a stable cash flow from the acquisition of 860 MW solar power stations from its parent company [3]. - Total power generation increased by 17.0% year-on-year to 4.472 billion kWh, although gross margin decreased by 2.35 percentage points to 65.55% due to increased market transactions affecting settlement prices [3]. Financial Projections - Adjusted net profit forecasts for 2025 and 2026 are 854 million RMB and 937 million RMB, respectively, with an expected net profit of 1.024 billion RMB in 2027 [5]. - The projected dividend per share for 2025 is approximately 0.051 HKD, with current price-to-earnings (P/E), price-to-book (P/B), and dividend yield ratios of 7.9x, 0.5x, and 6.4%, respectively [5]. Market Conditions - The "new and old separation" policy is expected to stabilize the revenue from existing power stations, allowing them to continue receiving guaranteed pricing until June 1, 2025 [4]. - The company has a cash and cash equivalents balance of 364 million RMB and a net debt of 5.58 billion RMB, significantly lower than the industry average [4].

Financial Performance - Revenue for the year ended December 31, 2024, was RMB 2,440.4 million, representing a 7.0% increase from RMB 2,280.8 million in 2023[3] - Profit attributable to equity holders of the company decreased by 12.0% to RMB 790.9 million from RMB 898.3 million in the previous year[3] - Basic and diluted earnings per share were RMB 9.55, down 15.9% from RMB 11.36 in 2023[3] - The company reported a net loss from other income of RMB 37.7 million, compared to a loss of RMB 4.8 million in 2023[5] - The company’s financial income decreased to RMB 2.6 million from RMB 6.1 million in the previous year[5] - The company's net profit attributable to equity holders for 2024 was RMB 790,851,000, down from RMB 898,292,000 in 2023, resulting in basic earnings per share of RMB 9.55 compared to RMB 11.36[31] - The net profit attributable to equity holders decreased by 12% to RMB 790.9 million, with basic earnings per share dropping by 15.9% to RMB 9.55[42] - EBITDA for the year was RMB 2,232.0 million, a 5.9% increase from RMB 2,107.9 million in 2023, with an EBITDA margin of 91.5%[71] - The net profit margin was 32.4%[71] Dividends - The company proposed a final dividend of HKD 0.027 per share, slightly up from HKD 0.026 in the previous year[3] - The interim dividend per share for 2024 was set at 2.3 HKD cents, down from 3.4 HKD cents in 2023, totaling RMB 177,750,000[32] - The company plans to distribute a final dividend of 2.7 HKD cents per share for 2024, compared to 2.6 HKD cents in 2023, amounting to RMB 212,758,000[32] - A final dividend of HKD 0.027 per share is proposed, subject to shareholder approval at the annual general meeting[73] Assets and Liabilities - Total assets increased to RMB 21,668.5 million as of December 31, 2024, compared to RMB 19,263.2 million in 2023[8] - Total liabilities increased to RMB 9,164.0 million from RMB 7,133.6 million in the previous year[9] - Non-current assets rose to RMB 16,727.4 million from RMB 14,732.7 million in the previous year[8] - Current assets increased to RMB 4,941.1 million, up from RMB 4,530.6 million in 2023[8] - The current ratio improved to 1.6 from 1.2 year-on-year, attributed to an increase in trade and other receivables and a decrease in the current portion of bank borrowings[74] - The net debt-to-equity ratio increased to 55.8% from 42.3% due to a decrease in cash and cash equivalents from electricity price adjustment subsidies and an increase in bank borrowings[76] Revenue Sources - Electricity sales revenue reached RMB 1,464,170 thousand, up from RMB 1,286,447 thousand in the previous year, representing a growth of 14%[18] - Revenue from electricity sales rose by 13.8% to RMB 1,464.2 million, while revenue from electricity price adjustments decreased by 2.1% to RMB 964.8 million[58] - The total revenue generated from solar power projects acquired in 2023 and 2024 was RMB 312.5 million, accounting for 12.8% of the company's total solar power business revenue[43] - The total revenue from solar power generation for the year ending December 31, 2024, is RMB 11.4 million, accounting for 0.5% of total revenue[62] Expenses - Sales costs increased by 14.8% to RMB 840.7 million from RMB 732.4 million in 2023, primarily due to higher employee benefits, electricity costs, and depreciation expenses[63] - Depreciation expenses for property, plant, and equipment increased to RMB 654,136 thousand from RMB 574,096 thousand, reflecting a rise of 14%[25] - Employee benefits expenses, including director remuneration, rose to RMB 65,747 thousand, up from RMB 60,095 thousand, marking an increase of 9%[25] - Financing costs increased to RMB 364,775,000 in 2024 from RMB 328,388,000 in 2023, with bank loan interest expenses rising to RMB 319,457,000[27] Trade Receivables - Trade receivables increased to RMB 4,247,035,000 in 2024 from RMB 3,602,110,000 in 2023, with a net trade receivable of RMB 4,204,565,000[33] - The company recorded a provision for trade receivables of RMB 42.47 million, compared to RMB 36.02 million in 2023[35] - The company reported a significant increase in trade receivables related to electricity sales, with amounts of RMB 168,355,000 in 2024 compared to RMB 180,978,000 in 2023[33] Acquisitions and Projects - The company completed the acquisition of seven solar power projects from Xinyi Solar during the reporting period[82] - The company plans to complete the acquisition of six solar power projects in the second half of 2024, which is expected to reflect in the company's performance for the fiscal year 2025[43] - The company acquired seven large solar power projects in China from Xinyi Solar Holdings Limited, with a total approved capacity of 860 MW[48] - As of December 31, 2024, the total approved capacity of the company's large solar power projects reached 4,510.5 MW, comprising 1,734 MW under feed-in tariff policies and 2,776.5 MW under grid parity policies[48] Regulatory Environment - The National Energy Administration's 2024 work plan emphasizes the development of clean energy and market mechanisms, supporting the sustainable development of the energy sector[49] - The introduction of the Energy Law aims to promote the development of wind and solar energy, providing a legal framework for high-quality energy development[52] - The company is closely monitoring the implementation of the market-oriented pricing reform for renewable energy, which will affect projects launched after June 1, 2025[54] Governance and Meetings - The board of directors includes four executive directors and three independent non-executive directors, ensuring a diverse governance structure[101] - The annual general meeting of shareholders is scheduled for May 30, 2025, with the share transfer registration suspended from May 27 to May 30, 2025[97] - The shareholder register will also be suspended from June 5 to June 9, 2025, for the eligibility to receive the final dividend, with transfer documents due by June 4, 2025[99] Miscellaneous - The company has transitioned its reporting currency from Hong Kong dollars to Renminbi to better reflect its business operations in mainland China[15] - The company did not engage in any significant purchases, sales, or redemptions of its listed securities during the reporting period[88] - The company had no significant contingent liabilities as of December 31, 2024[81] - Cash and cash equivalents balance stood at RMB 354.2 million as of December 31, 2024[77] - Total employee costs for the year were RMB 65.8 million, with 414 full-time employees as of December 31, 2024[85] - The announcement will be published on the Hong Kong Stock Exchange website and the company's website, ensuring transparency and accessibility of information[102]

Financial Performance - For the first half of 2024, the company's revenue decreased by 5.4% to HKD 1,218.4 million compared to HKD 1,288.6 million in the first half of 2023[11]. - Profit attributable to equity holders of the company fell by 30.4% to HKD 394.5 million, with basic earnings per share at HKD 4.78, down from HKD 7.48 in the same period last year[11]. - Total revenue for the first half of 2024 was HKD 1,218.4 million, a decrease of 5.4% compared to HKD 1,288.6 million in the first half of 2023[18]. - Revenue from power sales decreased by 4.0% to HKD 698.3 million, attributed to grid absorption limitations and increased market-based electricity trading[19]. - The net profit attributable to equity holders was HKD 394.5 million, down 30.4% from HKD 566.9 million, with the net profit margin decreasing from 44.0% to 32.4%[31]. - EBITDA for the first half of 2024 was HKD 1,128.1 million, a decrease of 6.7% from HKD 1,208.9 million in the first half of 2023[30]. - The operating profit for the first half of 2024 was HKD 765,839 thousand, a decline of 13.6% from HKD 886,017 thousand in the previous year[38]. - The net profit for the period was HKD 395,111 thousand, representing a decrease of 30.4% compared to HKD 567,709 thousand in 2023[39]. Solar Power Operations - The total approved generating capacity of the solar power projects operated and owned by the company reached 3,850.5 MW as of June 30, 2024, up from 3,650.5 MW as of December 31, 2023[10]. - The company reported a slight increase of 7.4% in total electricity generation from solar power projects compared to the first half of 2023, primarily due to the acquisition of a large solar power project[12]. - In the first half of 2024, the company completed the acquisition of a large solar power project in Guangdong with an approved capacity of 200 MW, contributing to steady growth in total power generation for the remainder of the year[13]. - The company operates a total of 3,850.5 MW across various solar power projects, including the newly added 200 MW project in Guangdong[21]. - The company plans to acquire a total of eight large solar power projects with an approved capacity of 790 MW, expected to commence in Q3 2024[15]. Dividends and Shareholder Returns - The company’s interim dividend per share was HKD 2.3, down from HKD 3.4 in the previous year[6]. - The interim dividend proposed for the six months ended June 30, 2024, is 2.3 HK cents per share, compared to 3.4 HK cents per share for the same period in 2023, reflecting a decrease of 32.4%[62]. - The interim dividend payment is expected to be made on October 16, 2024[85]. Financial Position and Liabilities - As of June 30, 2024, total assets increased by 1.8% to HKD 21,504.1 million, while net assets decreased by 2.2% to HKD 13,010.4 million[32]. - Total liabilities increased to HKD 8,493,671 thousand as of June 30, 2024, compared to HKD 7,826,245 thousand as of December 31, 2023, representing an increase of 8.5%[21]. - Non-current liabilities rose to HKD 4,988,676 thousand, up from HKD 3,652,775 thousand, marking a significant increase of 36.7%[21]. - Current liabilities decreased to HKD 3,504,995 thousand from HKD 4,173,470 thousand, a reduction of 16.0%[21]. - As of June 30, 2024, 21.9% of the total bank borrowings were denominated in RMB, with the effective annual interest rate reduced to 4.7%[16]. - The company’s bank borrowings increased to HKD 3,965,726 thousand for non-current liabilities, up from HKD 2,633,905 thousand, an increase of 50.6%[21]. Costs and Expenses - The group's cost of sales increased by 13.5% to HKD 435.9 million, up from HKD 384.0 million in the first half of 2023, primarily due to depreciation, electricity costs, and maintenance expenses[23]. - Gross profit decreased by 13.5% to HKD 782.5 million, down from HKD 904.6 million in the first half of 2023, with the gross profit margin dropping from 70.2% to 64.2%[24]. - Total financing costs increased to HKD 197.7 million from HKD 162.6 million, with bank loan interest expenses rising to HKD 173.5 million from HKD 119.4 million[28]. - Income tax expenses increased to HKD 175.8 million from HKD 158.0 million, mainly due to more solar power projects paying corporate income tax at a statutory rate of 25%[29]. Employee and Management Compensation - The group had 387 full-time employees as of June 30, 2024, with total employee costs of HKD 32.9 million for the first half of 2024[35]. - The total compensation for key management personnel rose to HKD 6,561 in the first half of 2024, compared to HKD 3,347 in the same period of 2023, reflecting an increase of approximately 96.6%[83]. Shareholder Structure and Governance - As of June 30, 2024, the company has a total of 4,260,473,401 shares held by Xinyi Energy (BVI) Limited, representing 51.600% of the issued share capital[100]. - The company’s major shareholder, Xinyi Group (Glass) Limited, holds 412,199,294 shares, accounting for approximately 4.992% of the issued share capital[100]. - The beneficial owner, Dr. Li Xianyi, holds 554,468,753 shares, which is about 6.715% of the issued share capital[100]. - The company has complied with the corporate governance code as per the listing rules during the first half of 2024[87]. - The audit committee consists of three independent non-executive directors, ensuring oversight of the financial reporting process[105]. Other Financial Metrics - The company reported a net cash inflow from operating activities of HKD 170,380 thousand for the six months ended June 30, 2024, compared to HKD 175,967 thousand for the same period in 2023[24]. - Cash and cash equivalents at the end of June 30, 2024, were HKD 472,140 thousand, down from HKD 780,226 thousand at the end of June 30, 2023, reflecting a decrease of 39.3%[25]. - The company recorded a profit of HKD 394,522 thousand for the period, contributing to total comprehensive income of HKD (82,465) thousand due to foreign currency translation losses[22].

Investment Rating - The report upgrades the investment rating of the company to "Buy" from "Neutral" [1][5]. Core Insights - The company's stock price has dropped significantly, making its valuation attractive. The unexpected interest rate cut by the Federal Reserve is expected to lower borrowing costs, positively impacting profitability [1]. - The price of photovoltaic modules continues to hit new lows, which is beneficial for the return on new projects due to reduced investment costs [1]. - The report raises the earnings forecast for 2024-2026 by 2%/3%/4% and maintains a target price of HKD 1.02, reflecting a potential upside of 18.6% from the current price [1][5]. Financial Summary - Revenue (Million HKD): 2022: 2,315, 2023: 2,517, 2024E: 2,459, 2025E: 2,786, 2026E: 3,165 [2][6]. - Net Profit (Million HKD): 2022: 971, 2023: 993, 2024E: 838, 2025E: 1,024, 2026E: 1,211 [2][6]. - Earnings Per Share (HKD): 2022: 0.13, 2023: 0.12, 2024E: 0.10, 2025E: 0.12, 2026E: 0.15 [2][6]. - Dividend Yield (%): 2022: 17.6, 2023: 7.0, 2024E: 5.9, 2025E: 7.2, 2026E: 8.5 [2][6]. Key Business Metrics - New Installed Capacity (MW): 2024E: 700, 2025E: 1,000, 2026E: 1,200 [4]. - Average Tax-Inclusive Electricity Price (RMB/kWh): 2024E: 0.61, 2025E: 0.57, 2026E: 0.54 [4]. - Gross Margin (%): 2024E: 63.0, 2025E: 63.0, 2026E: 63.0 [4].

Investment Rating - The report assigns a "Hold" rating to the company with a target price of HKD 1.00, indicating a potential upside of 14% from the current price of HKD 0.88 [2][8]. Core Insights - The company reported a profit of HKD 395 million for the first half of 2024, a decrease of 30.4% year-on-year, with revenues of HKD 1.218 billion, down 5.4% year-on-year. The decline is attributed to increased market transactions leading to lower settlement prices, higher abandonment rates in certain regions, and depreciation of the RMB against the HKD [5][11]. - The company is expected to face ongoing impacts from power restrictions, particularly in provinces like Hubei, which significantly affects its projects. The company is adopting a more cautious approach to project acquisitions, requiring a specific return on investment before proceeding [6][12]. - The company has increased its proportion of RMB loans, which now exceed 20%, and has seen a decrease in effective loan rates from 6.1% at the end of 2023 to 4.7% as of June 30, 2024. There is an expectation for further declines in loan rates in the second half of the year [7][13]. Financial Summary - For the fiscal year ending December 31, 2024, the company is projected to achieve revenues of HKD 2.801 billion, with a year-on-year growth of 11.2%. Net profit is expected to be HKD 1.094 billion, reflecting a growth of 10.2% [9][17]. - The company maintains a dividend payout ratio of 48% for the first half of 2024, with an interim dividend of HKD 0.023 per share [5][11]. - The company's total assets are projected to grow from HKD 21.504 billion in 2023 to HKD 23.504 billion in 2024, with total liabilities increasing correspondingly [17][18].