Ge Long Hui·2025-08-06 19:45Core Viewpoint - China Electric Power Holdings reported a revenue of HKD 42.854 billion for 1H25, a year-on-year decrease of 2.8%, but the net profit attributable to shareholders was HKD 5.624 billion, exceeding expectations due to gains from the sale of a 50% stake in the Wooreen energy storage project in Australia [1] Group 1: Financial Performance - Operating profit for 1H25 was HKD 5.192 billion, down 11.3% year-on-year [1] - The operating profit in Hong Kong increased by 8% year-on-year, despite a 1.7% decrease in electricity sales [1] - The operating profit in mainland China decreased by 13% due to pressure on electricity prices and increased curtailment rates in renewable energy projects [1] Group 2: Regional Performance - Australia’s operating profit fell by 86% due to intense competition in retail and maintenance issues at power plants [1] - India’s operating profit decreased by 61% primarily due to tariff adjustments and impairments in the KMTL transmission project [1] Group 3: Zero-Carbon Projects - The company is expanding its zero-carbon project portfolio, with 336 MW of renewable energy capacity commissioned in mainland China and the full commissioning of the Sidhpur wind farm in India [2] - By 2029, the company aims to achieve approximately 6 GW of renewable energy capacity in mainland China and 8 GW in India [2] - The successful implementation of zero-carbon plans is expected to inject growth potential into the company's performance [2] Group 4: Cash Flow and Dividends - Operating cash flow for 1H25 was HKD 7.1 billion, down 11.3% year-on-year, while free cash flow turned positive at HKD 0.1 billion [2] - The company maintained a dividend of HKD 1.26 per share for 1H25, indicating potential for future dividend increases [2] - Total liquidity reached HKD 29.6 billion, including undrawn bank loan facilities of HKD 26.6 billion [2] Group 5: Future Outlook and Target Price - The target price is set at HKD 78.40, maintaining a "Buy" rating despite adjustments in revenue forecasts for various regions [2] - The company expects net profits of HKD 10.670 billion, HKD 11.396 billion, and HKD 12.128 billion for 2025-2027, reflecting a year-on-year decline of 9.1% in 2025 [2] - The projected EPS and BPS for 2025 are HKD 4.22 and HKD 42.26, respectively [2]