Core Viewpoint - CICC has raised the net profit forecast for Xinyi Energy (03868) for 2025-26 by 5.2% and 5.0% to 1 billion and 1.07 billion HKD respectively, due to reduced financial expense ratio and income tax rate [1] Financial Performance - Xinyi Energy reported 1H25 revenue of 1.21 billion HKD, a year-on-year increase of 7.7%, and a net profit attributable to shareholders of 450 million HKD, up 23.4% year-on-year, exceeding CICC's expectations due to effective cost control [2] - The company declared an interim dividend of 2.9 HKD cents per share, a 26.1% increase year-on-year, with a payout ratio slightly rising to 49.4% [2] Sales and Generation Metrics - In 1H25, electricity sales increased by 22.7%, contributing to the 7.7% rise in revenue [3] - As of the end of 1H25, the total installed capacity was 4.54 GW, with 61.8% from grid-parity projects [3] - The average electricity price in 1H25 decreased by 12.2% to 0.49 HKD per kWh, likely due to increased market trading and structural factors [3] Cost Management - The company's net profit margin improved by 4.7 percentage points to 37.2% in 1H25, despite a slight decline in gross margin by 2.5 percentage points to 61.8% [3] - Financial expenses decreased by 19% to 150 million HKD, with the financial expense ratio down by 4 percentage points to 12.2% [3] - The effective interest rate on bank loans fell to 2.88% as of the end of 1H25, down from 3.5% at the end of 2024 [3] Leverage and Cash Flow - The company's debt-to-asset ratio remained stable at 42.3% as of the end of 1H25 [4] - Operating cash flow significantly increased by 82.2% to 310 million HKD in 1H25 [4] Project Acquisition Outlook - As of the end of 1H25, the parent company, Xinyi Solar, has approximately 1.2 GW of reserve projects available for acquisition, with 860 MW being grid-parity projects [5] - There are 200 MW of projects approved in 2024 but not yet acquired, located in Guangdong, where there is strong demand for green electricity [5]
中金：维持信义能源中性评级 升目标价至1.35港元