Huaneng Hydropower(SH:600025) Zhongyuan Securities·2025-09-08 10:46Investment Rating - The report upgrades the investment rating of the company to "Buy" [12][33] Core Views - The company achieved a revenue of 12.959 billion yuan in the first half of 2025, representing a year-on-year growth of 9.08%, and a net profit attributable to shareholders of 4.609 billion yuan, up 10.54% year-on-year [6][12] - The increase in revenue is driven by a 12.97% rise in electricity generation, totaling 52.752 billion kWh, attributed to favorable water conditions and increased installed capacity [7][12] - The company maintains a competitive electricity price, 0.4 cents higher than the average market price in Yunnan province, ensuring a strong market position [7][12] - The company’s cash flow from operating activities increased by 14.3% year-on-year, reflecting improved sales revenue and reduced capital expenditures [8][12] - The company’s financial costs decreased by 1.39% to 1.319 billion yuan, with a financial cost rate of 10.23%, indicating improved debt structure [9][12] - The company plans to enhance its clean energy base, focusing on hydropower and new energy development, which is expected to contribute to revenue growth from 2025 to 2027 [12][13] Summary by Sections Financial Performance - In H1 2025, the company reported a basic earnings per share of 0.25 yuan, a 13.64% increase year-on-year [6][12] - The weighted average return on equity rose to 7.22%, an increase of 1.25 percentage points compared to the same period in 2024 [6][12] Revenue and Profitability - The company’s gross profit margin stands at 60%, with a net asset return rate of 6.19% [2][12] - The total installed capacity reached 33.5374 million kW, with a significant increase in new energy capacity [7][12] Future Outlook - The company forecasts net profits of 9.375 billion yuan, 9.893 billion yuan, and 10.390 billion yuan for 2025, 2026, and 2027 respectively, with corresponding earnings per share of 0.52, 0.55, and 0.58 yuan [12][13]