Zhi Tong Cai Jing·2025-09-12 01:56Core Viewpoint - The report from Xingzheng International initiates coverage of Longyuan Power (001289)(00916) with an "Overweight" rating, highlighting short-term performance pressure due to fluctuations in green electricity prices, while maintaining optimism about the company's long-term growth potential driven by offshore wind and large-scale projects [1] Group 1: Company Overview - Longyuan Power is positioned as the wind power business integration platform of the State Energy Group, with a total installed capacity of 43.2 GW as of the end of H1 2025, comprising 31.4 GW of wind power and 11.8 GW of solar power [2] - The company has historically maintained a stable return on equity (ROE) in the range of 8-9%, with controllable declines in electricity prices over recent years [2] - The operating profit per kilowatt-hour for wind power has decreased from 0.24 yuan/kWh in 2017 to 0.20 yuan/kWh in 2024, and is expected to drop to 0.19 yuan/kWh in H1 2025 due to unfavorable wind conditions and price pressures [2] Group 2: Market Position and Growth Potential - Longyuan Power holds a leading position in resource allocation with 31.4 GW of controlled wind power capacity, including approximately 2.2 GW from Jiangsu offshore wind and 0.4 GW from Fujian offshore wind, primarily located in resource-rich areas and load centers [3] - The company has a significant pipeline of offshore wind projects exceeding 5 GW, distributed across Jiangsu, Fujian, and Hainan, which is expected to support profit growth as these projects come online [3] Group 3: Pricing and Policy Environment - The average electricity price for wind power has remained relatively stable, decreasing from 0.49 yuan/kWh in 2017 to 0.47 yuan/kWh in 2024, with expectations for improved pricing dynamics following the issuance of policy document 136 [4] - The acceleration of national subsidy recovery for green electricity companies has been observed since July, with the average trading price of green certificates rising by 35.42% month-on-month to 4.61 yuan per certificate in July [4]