CHINA LONGYUAN(00916) Guoyuan Securities·2025-06-03 07:51Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 8.00 per share, indicating a potential upside of 25% from the current price of HKD 6.41 [5][10]. Core Insights - The company's revenue for Q1 2025 decreased by 19% year-on-year to HKD 81.40 billion, and net profit attributable to shareholders fell by 22.07% to HKD 19.02 billion, primarily due to poor wind resources and rising operating expenses [7][8]. - The company plans to start new renewable energy projects totaling 5.5 GW in 2025, with 5 GW expected to be operational, including 3.2 GW from wind and 1.7 GW from solar [3][8]. - The company holds high-quality existing assets that ensure stable performance, benefiting from favorable regulatory conditions in regions like Shandong and Guangdong, which support the profitability of existing projects [4][9]. Summary by Sections Financial Performance - In Q1 2025, the company achieved a total generation of 202.86 billion kWh, a decrease of 4.42% year-on-year, but a growth of 8.81% when excluding the impact of thermal power divestiture. Wind power generation increased by 4.37% [7][8]. - The company’s operating expenses rose by 14% year-on-year, driven by higher depreciation, labor, and maintenance costs [7]. Project Development - As of March 2025, the company’s total installed capacity reached 41.15 million kW, with wind power accounting for 30.44 million kW and solar power approximately 10.70 million kW. The company has secured development indicators for 14.72 GW, including 6.37 GW for wind and 8.35 GW for solar [3][8]. Asset Quality - The company is positioned as a leader in the wind power sector, with a significant share of high-quality existing assets. The stability of revenue from these assets is expected to provide a competitive advantage in market transactions [4][9].