HTSC·2025-10-30 08:58Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 4.70 and HKD 3.69 [6][5]. Core Views - The company's revenue for Q3 2025 was RMB 20.556 billion, a year-on-year decrease of 10.21% but a quarter-on-quarter increase of 7.40%. The net profit attributable to the parent company was RMB 2.624 billion, down 8.81% year-on-year and down 10.32% quarter-on-quarter, but within the expected range [1][2]. - The report highlights that the annual trading price for nuclear power in Guangdong is expected to increase in 2026 due to the cancellation of variable cost compensation, which could enhance profitability [3][5]. - The company is managing 20 nuclear power units under construction, with three expected to be operational by the end of 2025 and in 2026 [4][5]. Summary by Sections Financial Performance - For the first nine months of 2025, the company achieved revenue of RMB 59.723 billion, a year-on-year decrease of 4.09%, and a net profit of RMB 8.576 billion, down 14.14% year-on-year [1][2]. - The total on-grid electricity from the company's nuclear power units increased by 3.17% year-on-year to 1,721.79 billion kWh [2]. Market Outlook - The cancellation of the variable cost compensation mechanism in Guangdong is expected to lead to a year-on-year increase in the trading price of nuclear power, with an estimated profit increase of approximately RMB 209 million for the company [3][5]. - The report anticipates that the average comprehensive electricity price for the company's market-oriented units in Guangdong will increase by about 5 cents per kWh [3]. Construction and Development - The company is progressing steadily with its construction projects, with three units expected to be operational in late 2025 and early 2026 [4][5]. - The company holds significant stakes in several nuclear power projects, with acquisitions still in progress [4]. Profit Forecast and Valuation - The report maintains profit forecasts for the company at RMB 9.788 billion for 2025, RMB 10.789 billion for 2026, and RMB 11.326 billion for 2027 [5][10]. - The estimated PE ratio for 2026 is set at 22.0x, with a target price based on this valuation [5][10].