CHINA POWER(02380) 交银国际证券·2025-03-07 03:56Investment Rating - The report maintains a "Buy" rating for the company, China Power (2380 HK), with a target price adjusted to HKD 3.72, reflecting a potential upside of 26.5% from the current price of HKD 2.94 [2][14]. Core Insights - The company is expected to see a 53% increase in net profit for the year 2024, despite a downward adjustment in earnings forecasts for 2024 and 2025 by 9.5% and 22.2% respectively due to lower-than-expected wind and solar generation [2][5]. - The dividend yield for 2024 and 2025 is projected to exceed 7%, making it an attractive investment opportunity despite the earnings adjustments [5][6]. Financial Performance Summary - Revenue for 2024 is forecasted at RMB 49,191 million, a decrease of 3.8% from previous estimates, while 2025 revenue is expected to be RMB 50,997 million, down 9.1% [4][16]. - Operating profit for 2024 is projected at RMB 12,438 million, reflecting a 6.4% decrease, and for 2025, it is expected to be RMB 14,012 million, down 16.3% [4][16]. - Net profit for 2024 is revised to RMB 4,072 million, a 9.5% reduction, and for 2025, it is expected to be RMB 4,857 million, down 22.2% [4][16]. Generation Capacity and Production Forecast - The company anticipates an 18.6% year-on-year increase in power generation for 2024, with hydropower generation significantly recovering by 52% [5][6]. - For 2025, the company expects a 3% decrease in unit fuel costs, but a 7% decline in the ignition price difference for thermal power due to changes in long-term electricity prices [5][6]. Valuation Summary - The target price of HKD 3.72 is derived from a sum-of-the-parts valuation, with contributions from various segments: thermal power at RMB 8,980 million, hydropower at RMB 7,787 million, wind power at RMB 24,997 million, and solar power at RMB 19,776 million [10][14].