ZZEPC(SH:600023) HTSC·2025-04-29 08:55Investment Rating - The investment rating for the company is "Buy" with a target price of 6.89 RMB [7]. Core Views - The company reported a revenue of 88.003 billion RMB for 2024, a year-on-year decrease of 8.31%, while the net profit attributable to shareholders was 7.753 billion RMB, an increase of 18.92% [1]. - The company has a strong dividend capability with a dividend per share (DPS) of 0.29 RMB (including tax) for 2024, resulting in a dividend payout ratio of 50.15% and a dividend yield of 4.97% [1]. - The first quarter of 2025 saw a revenue decline of 12.09% year-on-year to 17.602 billion RMB, with a net profit decrease of 40.81% to 1.074 billion RMB, primarily due to a larger-than-expected decline in investment income from joint ventures [1][3]. Revenue and Profitability - The company's controllable and joint venture thermal power net profit for 2024 is estimated at approximately 6 billion RMB, a year-on-year increase of 45%, driven by a 94% increase in controllable thermal power net profit [2]. - The estimated net profit per kilowatt-hour for controllable thermal power in 2024 and Q1 2025 is 3.5 and 1.2 fen respectively, with a year-on-year increase of 1.7 fen and a decrease of 1.2 fen [2]. Investment Income - The investment income from joint ventures for 2024 was 3.766 billion RMB, a year-on-year decrease of 11%, with significant contributions from nuclear power, gas turbines, and coal machines [3]. - In Q1 2025, the investment income from joint ventures dropped by 32% to 841 million RMB, mainly due to pressure on the utilization hours and electricity prices of some joint venture power plants [3]. Valuation and Forecast - The target price has been adjusted to 6.89 RMB, down from a previous value of 7.23 RMB, reflecting a 13x PE for 2025E, considering the company's higher dividend payout ratio compared to peers [4]. - The forecast for net profit attributable to shareholders for 2025 and 2026 has been reduced by 12.0% and 13.3% to 7.105 billion RMB and 7.199 billion RMB respectively [4].