CTGR(SH:600905) EBSCN·2025-09-04 09:03Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance [6][3]. Core Views - The company's revenue for the first half of 2025 was 14.736 billion, a decrease of 2.19% year-on-year, while the net profit attributable to shareholders was 3.815 billion, down 5.48% year-on-year. The second quarter of 2025 saw revenue of 7.107 billion, a decline of 0.79%, and a net profit of 1.368 billion, down 15.41% year-on-year [1][2]. - The decline in performance is attributed to several factors, including a decrease in average utilization hours for power generation, a drop in average electricity prices due to changes in electricity trading structures, and increased depreciation and operational costs as new projects come online [1][2]. - Despite short-term performance pressures, the company has a robust pipeline of projects, with significant capacity in construction and planned projects, indicating strong long-term growth potential [3][2]. Summary by Sections Financial Performance - In the first half of 2025, the company experienced a 16.89% increase in operating costs, reaching 7.801 billion, leading to an overall gross margin of 47.06%, a decrease of 8.62 percentage points year-on-year [2]. - The company reported a decrease in utilization hours for wind and solar power generation, with wind down by 97 hours and solar down by 96 hours compared to national averages, although the company’s generation hours remain above national averages [2]. Project Pipeline - As of the first half of 2025, the company added 2.1807 million kilowatts of new grid-connected capacity, with 0.5381 million kilowatts from wind and 1.6426 million kilowatts from solar [3]. - The company has a total of 13.8178 million kilowatts of planned capacity under construction, with significant future projects in both wind and solar energy [3]. Profit Forecast and Valuation - The profit forecasts for 2025 to 2027 have been adjusted downward due to significant declines in electricity prices, with expected net profits of 6.739 billion, 7.046 billion, and 7.430 billion respectively [3][5]. - The current stock price corresponds to a price-to-earnings ratio of 18 for 2025, indicating a reasonable valuation given the company's growth prospects [3][5].