GEPIC(SZ:000791) HTSC·2025-08-15 11:53Investment Rating - The report maintains a "Buy" rating for Gansu Energy [6][5][4] Core Views - Gansu Energy's H1 2025 revenue reached 3.931 billion RMB, a year-on-year increase of 0.19%, with a net profit attributable to shareholders of 0.825 billion RMB, up 16.87% year-on-year [1] - The company's hydropower segment showed significant price advantages in spot trading, while the thermal power segment demonstrated strong profitability [1] - The report highlights a substantial increase in hydropower on-grid electricity prices, which rose by 39.99% year-on-year to 0.376 RMB/kWh, despite a decrease in hydropower generation due to lower water inflow [2] - The thermal power segment's on-grid electricity volume increased by 5.46% year-on-year, with a corresponding price increase of 2.30% to 0.369 RMB/kWh, leading to a net profit increase of 57.59% for the Changle company [3] - Wind and solar power segments faced price pressures, with on-grid electricity prices dropping by 33.80% and 17.17% respectively, resulting in decreased gross margins [4] Summary by Sections Financial Performance - H1 2025 revenue was 3.931 billion RMB, with a net profit of 0.825 billion RMB, reflecting a year-on-year growth of 0.19% and 16.87% respectively [1] - Q2 2025 revenue was 1.692 billion RMB, down 0.73% year-on-year and 24.40% quarter-on-quarter, with net profit at 0.345 billion RMB, a year-on-year increase of 1.16% but a quarter-on-quarter decrease of 28.04% [1] Hydropower Segment - H1 2025 hydropower on-grid electricity volume decreased by 21.07% year-on-year to 1.129 billion kWh, with Q2 2025 down 32.44% year-on-year [2] - The hydropower on-grid electricity price increased significantly, leading to a gross margin rise of 6.07 percentage points to 31.17% [2] Thermal Power Segment - H1 2025 thermal power on-grid electricity volume increased by 5.46% year-on-year to 8.879 billion kWh, with a net profit per kWh of 0.113 RMB, up 3.7 cents year-on-year [3] - The Changle power plant's net profit reached 1 billion RMB, benefiting from lower coal prices [3] Wind and Solar Power Segment - H1 2025 wind and solar on-grid electricity prices fell to 0.365 RMB/kWh and 0.3 RMB/kWh, respectively, with gross margins decreasing significantly [4] - No new renewable energy installations were added in H1 2025, with approved capacities of 1.25025 million kW for wind and 3.85 million kW for solar [4] Profit Forecast and Valuation - The report revises down the net profit forecasts for 2025-2027 to 1.895 billion RMB, 2.247 billion RMB, and 2.317 billion RMB, respectively, with corresponding EPS of 0.58, 0.69, and 0.71 RMB [5] - The target price is set at 8.18 RMB, based on a PE ratio of 14.0x for 2025E [5]