Core Viewpoint - The report from CMB International indicates that Longyuan Power's operating hours and on-grid electricity prices were under pressure in the first half of the year, which was anticipated. The company's net profit decreased by 13.6% year-on-year to 3.52 billion yuan, aligning with market expectations [1] Financial Performance - The decline in net profit was primarily due to reduced operating hours and falling electricity prices, while revenue growth lagged behind the cost increase associated with installed capacity growth [1] - Wind and solar power generation increased by 6.1% and 71.4% year-on-year, respectively, contributing to an overall rise in total power generation [1] Earnings Forecast and Valuation - The company slightly adjusted its earnings forecasts for 2025 and 2026 downwards by approximately 0.8% and 0.6%, respectively, reflecting the impact of declining electricity prices [1] - The target price was raised from 7.81 HKD to 8.23 HKD, maintaining a "Buy" rating [1] Dividend Policy - The company announced a dividend plan for 2025-2027, committing to a cash dividend ratio of no less than 30% of net profit [1] - Expected dividend yields for 2025 and 2026 are projected at 3.8% and 4%, respectively [1]

Core Viewpoint - The company reported a mixed performance for the first half of 2025, with revenue growth driven by increased electricity generation despite declining average on-grid prices for wind and solar energy [1][2]. Financial Performance - In 1H25, the company achieved revenue of 15.66 billion RMB, a year-on-year increase of 3.1% in continuing operations; net profit attributable to shareholders was 3.52 billion RMB, down 14.4% year-on-year [1]. - In Q2 2025, revenue reached 7.52 billion RMB, with a 5.6% increase in continuing operations year-on-year; net profit attributable to shareholders was 1.54 billion RMB, a slight decrease of 0.2% year-on-year [1]. Operational Analysis - The average on-grid electricity prices for wind and solar energy were 422 RMB/MWh and 273 RMB/MWh respectively, reflecting a decrease of 16 RMB/MWh and 5 RMB/MWh year-on-year [1]. - Wind power generation increased by 6.1% and solar power generation surged by 71.4% year-on-year, compensating for the negative impact of declining prices [1][2]. - Wind power sales revenue decreased by 1.6% due to unfavorable wind conditions, while solar power sales revenue increased by 65.6% due to smaller price declines and higher generation growth [1][2]. Capacity and Investment - The installed capacity for wind and solar power increased by 10.8% and 54.8% year-on-year respectively [2]. - Capital expenditures reached approximately 11.8 billion RMB, a decrease of 5.4% year-on-year, primarily due to reduced funding for new energy projects compared to the previous year [2]. Strategic Focus - The company aims to enhance its competitive position in the new energy market by focusing on wind power development, particularly in high-capacity and high-price regions [2]. - A total of 1.24 GW of new development agreements were signed during the period, with wind power accounting for 83.9% of this figure [2]. - The company plans to distribute a mid-term dividend of 0.1 RMB per share (pre-tax) to shareholders, reflecting its commitment to shareholder value [2]. Profit Forecast and Valuation - The company is projected to achieve net profits of 6.97 billion RMB, 7.62 billion RMB, and 8.38 billion RMB for the years 2025 to 2027, with corresponding EPS of 0.83 RMB, 0.91 RMB, and 1.00 RMB [3]. - The current stock price corresponds to a PE valuation of 8x, 7x, and 6x for the years 2025, 2026, and 2027 respectively, maintaining a "buy" rating [3].

全年新增装机维持5 吉瓦的目标，"十五五"仍聚焦大基地及海风建设。随之"136 文"新政出台，公司上 半年新增装机规模加速至达2.1 吉瓦（风电/光伏分别占0.99/1.09 吉瓦），管理层维持全年新增装机5 吉 瓦目标，当中包括腾格里大基地项目约1 吉瓦的装机，将在3Q25 内投运。资源获取方面，上半年新增 开发指标4.75 吉瓦（风电/光伏分别为2.98 /1.77 吉瓦）。公司表示，"十五五"仍集中大基地及海上风电 的建设，我们预计2026 和2027 年新增装机在6 吉瓦。我们预计公司2025 年全年资本开支在200 亿元左 右，净负债股本比预期从上半年的168%回落至年底的161%。 轻微下调盈利预测，预期2025/26 年盈利温和增长。我们下调公司2025/26 年盈利预测约0.8%/0.6%，主 要反映电价同比下降的影响。下半年我们预计公司因以大换小的风机改造，将有约9 亿元的减值，2025 年盈利仍将同比增长4.4%。公司已公布2025-2027 年分红规划，现金分红比例不低于归母净利润30%。 目前预计2025/26 年股息率在3.8%/4.0%。我们维持9 倍市盈率的估值基准不变（相对五年 ...

Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Views - The company's revenue for the first half of 2025 was 15.657 billion yuan, a year-on-year decrease of 18.61%, while the net profit attributable to the parent company was 3.375 billion yuan, down 13.79% year-on-year [4][6]. - Despite the overall revenue decline, the new energy business maintained growth, with wind power generation hours showing improvement in the second quarter, leading to a net profit of 1.473 billion yuan, a slight decrease of 0.07% year-on-year [4][6]. - The company has continued to expand its installed capacity, with new wind and solar installations contributing to a total installed capacity of 43.1967 million kilowatts, a year-on-year increase of 14.03% [4][6]. Summary by Sections Financial Performance - The company's total revenue for the first half of 2025 was 15.657 billion yuan, down 18.61% year-on-year, with a net profit of 3.375 billion yuan, down 13.79% year-on-year [4][6]. - The second quarter saw a revenue of 7.517 billion yuan, a decrease of 18.18% year-on-year, but the net profit showed signs of stabilization [4][6]. Business Segments - The wind power segment experienced a revenue decline of 239 million yuan, while the solar power segment saw an increase of 642 million yuan, indicating a mixed performance across the new energy sectors [4][6]. - The average on-grid electricity price decreased by 5.45% to 399 yuan per megawatt-hour, impacting the wind power revenue negatively [4][6]. Installed Capacity and Growth - The company added 987,000 kilowatts of new wind capacity and 1,096,600 kilowatts of solar capacity in the first half of 2025, with total installed capacity reaching 43.1967 million kilowatts [4][6]. - The company plans to start new projects totaling 5.5 million kilowatts in 2025, ensuring a solid foundation for long-term growth [4][6]. Profitability and Forecast - The gross profit for the first half of 2025 was 6.4 billion yuan, down 9.19% year-on-year, with an expected EPS of 0.82, 0.89, and 0.95 yuan for 2025-2027 [4][6].

Core Viewpoint - Bank of America Securities forecasts that Longyuan Power (00916) will continue to face profit pressures due to declining electricity prices and utilization rates [1] Summary by Categories Earnings Forecast - The firm has lowered Longyuan Power's earnings estimates for the next two years by 4% to reflect a more conservative outlook for the second half of the year [1] - The anticipated provincial bidding results for wind and solar power capacity are expected to lead to further profit downgrades [1] Rating and Target Price - The rating for Longyuan Power is maintained at "underperform" with the target price adjusted from HKD 5.7 to HKD 6 [1] Interest Costs and Uncertainty - Lower interest costs are expected to partially offset the earnings decline [1] - The firm notes a high level of uncertainty in forecasts, particularly with the potential for asset injections to provide a boost in the second half of the year [1]

Core Viewpoint - Bank of America Securities anticipates that Longyuan Power (001289)(00916) will continue to face profit pressures due to declining electricity prices and utilization rates [1] Group 1: Earnings Forecast - The upcoming provincial bidding results for wind and solar power capacity are expected to lead to further profit downgrades for Longyuan Power [1] - The firm has lowered its earnings estimates for Longyuan Power by 4% for the next two years, reflecting a more conservative outlook for the second half of the year [1] - Despite the earnings downgrade, the lower interest costs are expected to partially offset the impact [1] Group 2: Rating and Target Price - Bank of America maintains a "Underperform" rating for Longyuan Power, with the target price adjusted from HKD 5.7 to HKD 6 [1] - The firm notes a high level of uncertainty in its forecasts, particularly regarding potential asset injections in the second half of the year [1]

Investment Rating - The report assigns a "Buy" rating for the company [2][14]. Core Views - The company is expected to maintain its annual new installed capacity target of 5 GW despite weaker operational performance in the first half of 2025, which is in line with expectations. The target price has been raised to HKD 8.23, reflecting a potential upside of 19.8% from the current price of HKD 6.87 [2][6][14]. Financial Overview - Revenue for 2023 is projected at RMB 29,631 million, with a year-on-year decline of 25.7%. The revenue is expected to grow to RMB 34,606 million by 2025, reflecting a growth rate of 10.3% [5][15]. - Net profit for 2023 is estimated at RMB 6,157 million, with a projected increase to RMB 6,658 million by 2025, indicating a growth of 4.4% [5][15]. - The company has a dividend payout ratio of 24% for the interim dividend, with a planned cash dividend ratio of no less than 30% of net profit for 2025-2027 [6][15]. Operational Performance - In the first half of 2025, the company reported a net profit of RMB 3,519 million, a decrease of 13.6% year-on-year, primarily due to lower utilization hours and electricity prices [6][7]. - The average utilization hours for wind power were 1,102 hours, slightly above the industry average of 1,087 hours, but down by 68 hours year-on-year [6][8]. - The company achieved a new installed capacity of 2.1 GW in the first half of 2025, with wind and solar contributing 0.99 GW and 1.09 GW, respectively [6][9]. Market Position - The company’s market capitalization is approximately HKD 22,793.84 million, with a 52-week high of HKD 8.29 and a low of HKD 5.31 [4][6]. - The average daily trading volume is reported at 60.20 million shares [4]. Future Projections - The company aims to achieve a total installed capacity of 46,643 MW by 2025, with significant contributions from both wind and solar energy [9][15]. - Capital expenditures for 2025 are expected to be around RMB 20 billion, with a net debt-to-equity ratio projected to decrease from 168% to 161% by year-end [6][15].

Core Viewpoint - Longyuan Power (001289) reported a decline in revenue and net profit for the first half of 2025, with total revenue of 15.657 billion yuan, down 18.61% year-on-year, and net profit attributable to shareholders of 3.375 billion yuan, down 13.79% year-on-year. However, the company's profitability improved, with an increase in gross margin and net margin [1][3]. Financial Performance - Total revenue for the first half of 2025 was 15.657 billion yuan, a decrease of 18.61% compared to 2024 [1]. - Net profit attributable to shareholders was 3.375 billion yuan, down 13.79% year-on-year [1]. - Gross margin increased to 40.87%, up 11.56% year-on-year, while net margin rose to 25.58%, an increase of 5.38% [1]. - Total expenses (selling, administrative, and financial) amounted to 1.922 billion yuan, accounting for 12.27% of revenue, which is a 25.16% increase year-on-year [1]. - Earnings per share decreased to 0.4 yuan, down 13.01% year-on-year [1]. Cash Flow and Debt - Cash flow from operating activities decreased by 8.49%, attributed to the absence of cash inflow from the thermal power segment and reduced renewable energy subsidies [3][4]. - The company’s net cash flow from investing activities increased by 11.69%, due to reduced capital expenditures on wind and solar projects compared to the previous year [3]. - The net cash flow from financing activities decreased by 11.71%, as cash received from borrowings fell more than cash used for debt repayment [4]. Business Evaluation - The company's return on invested capital (ROIC) was 5.46%, indicating average capital returns [7]. - The historical median ROIC since the company’s listing is 5.74%, suggesting that investment returns have been generally average [7]. - The company’s cash flow situation is concerning, with cash and cash equivalents only covering 4.3% of current liabilities [7]. - The debt situation is also notable, with interest-bearing debt to asset ratio reaching 52.74% [7]. Market Position - Longyuan Power's performance is influenced by its capital expenditures, which need careful evaluation to ensure they are yielding satisfactory returns [7]. - The company has seen a significant impact on revenue due to the disposal of its thermal power segment, which has affected both income and costs [3][4].

Trading Information - As of August 20, 2025, Longyuan Power (001289) closed at 16.62 yuan, down 0.12%, with a turnover rate of 0.13%, trading volume of 65,400 shares, and a transaction amount of 107 million yuan [1] - On the same day, the fund flow for Longyuan Power showed a net inflow of 8.81 million yuan from main funds, a net inflow of 1.36 million yuan from retail funds, and a net outflow of 10.17 million yuan from individual investors [1] Performance Disclosure Highlights - Longyuan Power's mid-year report for 2025 indicated a main revenue of 15.657 billion yuan, a year-on-year decrease of 18.61% [2][3] - The net profit attributable to shareholders was 3.375 billion yuan, down 13.79% year-on-year [2][3] - The net profit excluding non-recurring items was 3.287 billion yuan, a decrease of 12.26% year-on-year [2][3] - In Q2, the main revenue was 7.517 billion yuan, down 18.18% year-on-year, while the net profit attributable to shareholders was 1.473 billion yuan, a slight decrease of 0.07% [2] - The net profit excluding non-recurring items for Q2 was 1.426 billion yuan, an increase of 5.64% year-on-year [2] - The debt ratio stood at 67.13%, with investment income of 120 million yuan and financial expenses of 1.719 billion yuan, while the gross profit margin was 40.87% [2] Company Announcements Summary - Longyuan Power plans to distribute a cash dividend of 1.00 yuan (pre-tax) for every 10 shares, with a total cash dividend amounting to approximately 835.98 million yuan, pending shareholder approval [4][6] - The board approved the mid-year profit distribution plan, which represents 24.77% of the net profit [6][8] - The company reported a net cash flow from operating activities of 6.673 billion yuan, down 8.49% year-on-year [3] - Total assets reached approximately 269.1 billion yuan, a year-on-year increase of 4.55%, while the net assets attributable to shareholders grew by 2.11% to approximately 74.83 billion yuan [3]

Summary of Longyuan Power's Conference Call Industry Overview - The renewable energy market is undergoing significant reforms, transitioning from policy-driven to market-driven dynamics, as indicated by Document 2 and Document 4. The issuance of Document 136 in February 2025 allows renewable energy to enter the electricity market fully, establishing a new pricing and trading framework. Over ten provinces have already implemented detailed rules. Key Company Insights - **Renewable Energy Generation**: In the first half of 2025, Longyuan Power generated 39.652 billion kWh of renewable energy, a year-on-year increase of 12.73%. Wind power contributed 33.503 billion kWh (up 6.07%), while solar power reached 6.147 billion kWh (up 71.37%) [2][5]. - **Project Development**: The company is advancing major projects in Ningxia and Gansu, with a total development target of 4.75 million kW, including 2.98 million kW from wind and 1.77 million kW from solar [2][6]. - **Financial Performance**: Revenue for the first half of 2025 was CNY 15.657 billion, down 18.6% year-on-year, primarily due to the divestment of thermal power assets. Excluding thermal power, renewable energy revenue grew by 3.1% [2][13]. - **Net Profit**: The net profit attributable to equity holders was CNY 3.519 billion, a decrease of 14.4% year-on-year, influenced by lower utilization hours and electricity prices [2][14]. Financial Management - **Debt Issuance**: The company issued CNY 22 billion in bonds at an average financing cost of 2.31%, a reduction of 0.37 percentage points from the previous year [2][11]. - **Asset Management**: As of June 2025, total assets reached CNY 269.167 billion, a 4.47% increase from the end of 2024. The net debt-to-equity ratio was 63%, up 0.61 percentage points [2][16]. Market Strategies - **Pricing and Sales**: The average bidding price for wind power was CNY 0.422 per kWh, down 1.6 cents year-on-year, while solar prices remained stable at CNY 0.273 per kWh. Green certificate transactions reached 4.1 billion kWh, a 41% increase [2][9]. - **Marketing Initiatives**: The company is enhancing its marketing strategies to adapt to the accelerated market environment, focusing on optimizing subsidy recovery and improving marketing processes [2][9]. Technological Innovations - Longyuan Power is committed to technological advancements, with significant projects in areas such as underwater monitoring systems and ice prevention technologies. The company has filed 56 patent applications related to its innovations [2][10]. Future Outlook - **Sustainable Growth**: The company aims to maintain sustainable growth and high-quality development, focusing on enhancing core competitiveness and transitioning towards a green, market-oriented model [2][17]. - **Market Adaptation**: Longyuan Power is actively responding to the challenges posed by the 136 document, implementing cost control strategies and enhancing digital capabilities to improve operational efficiency [2][22]. Challenges and Opportunities - The implementation of the 136 document is expected to reduce guaranteed revenue for renewable projects, increasing market price volatility. Longyuan Power is preparing to adapt its strategies accordingly [2][20][21]. Conclusion Longyuan Power is navigating a transformative period in the renewable energy sector, focusing on project development, financial management, and technological innovation to sustain growth and adapt to market changes. The company is well-positioned to leverage emerging opportunities while addressing the challenges presented by regulatory reforms.