CHINA RES POWER(00836) 国盛证券·2024-09-01 03:43Investment Rating - Maintain "Buy" rating with a target price of HKD 27.89 per share, implying a 2024 P/E of 9x [2] Core Views - The company's profitability improved significantly in H1 2024, with gross profit up 28% YoY to HKD 10.85 billion and net profit attributable to shareholders up 39% YoY to HKD 9.4 billion [1] - Thermal power segment profitability improved substantially, with segment profit up 231% YoY to HKD 5.1 billion, driven by lower fuel costs [1] - Renewable energy segment maintained high profitability with a 50% profit margin [1] - The company is accelerating its energy transition, targeting 10GW of new wind and solar capacity in 2024 and 16.5GW in 2025 [2] - The company has stable dividend payout, with 2023 dividend of HKD 1.415 per share and 62% payout ratio [1] Financial Performance - H1 2024 revenue was HKD 51.1 billion, down 0.7% YoY, mainly due to lower average on-grid tariffs for thermal power (-3%) and wind power (-1.9%) [1] - Gross margin improved by 4.7/6.9 ppts YoY/QoQ to 21.2% [1] - Net profit margin improved by 5.2/9.5 ppts YoY/QoQ to 18.3% [1] - Thermal power segment margin improved by 9.6 ppts YoY to 13.5% [1] - Forecast 2024-2026 revenue of HKD 107.8/116.5/124.6 billion, with 4.4%/8.0%/6.9% YoY growth [2] - Forecast 2024-2026 net profit of HKD 14.9/16.7/18.6 billion, with 35%/12%/11% YoY growth [2] Capital Expenditure and Energy Transition - 2024 capex guidance of HKD 59.9 billion, with HKD 44.6 billion allocated to wind and solar projects [2] - Target to increase renewable energy capacity to over 50% of total by end-2025 [2] - H1 2024 new grid-connected capacity reached 930MW [2] Valuation - Target market capitalization of HKD 134.2 billion [2] - 2024E P/E of 6.8x, P/B of 1.5x [2] - 2024E ROE of 18.4% [2]