ZZEPC(SH:600023) SINOLINK SECURITIES·2025-04-29 04:20Investment Rating - The report maintains a "Buy" rating for the company, with expected earnings per share (EPS) of 0.50, 0.59, and 0.61 for 2025 to 2027, respectively, corresponding to price-to-earnings (P/E) ratios of 12x, 10x, and 10x [4] Core Views - The company reported a revenue of 88 billion yuan for 2024, a decrease of 8.3% year-on-year, while net profit attributable to shareholders increased by 18.9% to 7.75 billion yuan [2] - The first quarter of 2025 saw a revenue of 17.6 billion yuan, down 12.1% year-on-year, with a net profit of 1.07 billion yuan, reflecting a significant decline of 40.8% [2] - The company plans a cash dividend of 0.29 yuan per share for 2024, representing a 50.2% payout ratio, with a current dividend yield of approximately 5.0% [2] Summary by Sections Financial Performance - In 2024, the company achieved an on-grid electricity output of 164.7 billion kWh, up 6.6% year-on-year, primarily due to the commissioning of new power generation units [2] - The cost of fuel and spare parts per kWh decreased by 8.3%, which was greater than the average on-grid electricity price decline of 3.6% [2] Market Conditions - The decline in electricity prices in Q1 2025 was greater than the reduction in costs, leading to pressure on profitability, with a gross margin decrease of 2.3 percentage points to 7.1% [3] - The company expects marginal improvement in profitability as high coal inventory is consumed, potentially narrowing the performance decline in subsequent quarters [3] Capital Expenditure and Cash Flow - 2024 marked the peak construction period for the company's thermal power projects, resulting in a net cash outflow of 8.68 billion yuan from investment activities [4] - The company’s operating cash flow is expected to cover capital expenditures, reducing the debt-to-asset ratio from 45.7% at the end of 2023 to 42.3% in Q1 2025 [4] - The net cash outflow from investment activities in Q1 2025 decreased by 24.2% year-on-year, indicating improved cash flow health [4] Future Projections - The company is projected to achieve net profits of 6.63 billion yuan, 7.91 billion yuan, and 8.14 billion yuan from 2025 to 2027, with corresponding EPS estimates [4] - Revenue forecasts show a decline in 2025, with a projected revenue of 81.78 billion yuan, followed by slight growth in subsequent years [8]