龙源电力：政策推动电力央企重组，市场回暖加速估值修复

Investment Rating - The report maintains a "Buy" rating for Longyuan Power (0916.HK) with a target price of HKD 10, representing a potential upside of 46% from the current price of HKD 6.84 [2][7]. Core Insights - The recent policy from the China Securities Regulatory Commission (CSRC) regarding mergers and acquisitions is expected to accelerate the restructuring of state-owned power enterprises, which will benefit Longyuan Power as it is positioned to receive quality clean energy assets from its parent company, State Energy Investment Group [5][9]. - The negative factors affecting green electricity have been fully reflected in the market, and the recent recovery in market sentiment is likely to support a valuation rebound for the green electricity sector, particularly for state-owned companies like Longyuan Power that have significant price discounts [6][10]. - The financial projections indicate a recovery in revenue and net profit, with expected revenues of RMB 39,286 million in 2024 and RMB 43,768 million in 2025, alongside a net profit of RMB 6,019 million in 2024 and RMB 7,212 million in 2025 [8][14]. Summary by Sections Investment Rating - Buy rating with a target price of HKD 10, indicating a 46% upside potential from the current price [2][7]. Financial Performance - Revenue projections for 2024 and 2025 are RMB 39,286 million and RMB 43,768 million, respectively, with a net profit of RMB 6,019 million in 2024 and RMB 7,212 million in 2025 [8][14]. - The report anticipates a recovery in net profit growth, with a projected increase of 19.8% in 2025 [8][14]. Market Context - The CSRC's new policies are expected to enhance the efficiency of mergers and acquisitions in the power sector, facilitating Longyuan Power's strategic asset injections [5][9]. - The green electricity sector is showing signs of valuation recovery due to improved market conditions and sentiment, which is particularly favorable for Longyuan Power given its current valuation [6][10].