HTSC·2026-03-01 04:20Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 86.64, up from the previous target of HKD 78.40 [6][4]. Core Insights - The company reported a revenue of HKD 88.018 billion for 2025, a decrease of 3.2% year-on-year, and a net profit of HKD 10.468 billion, down 10.8% year-on-year, slightly below previous expectations [1][4]. - The company is expected to see a stable dividend payout, with a proposed dividend per share (DPS) of HKD 3.20 for 2025, reflecting a 1.6% increase from 2024 [1][3]. - The company is adjusting its zero-carbon project investment plans, aiming for installed capacity of approximately 5 GW in mainland China and 9 GW in India by 2030, which is expected to drive future growth [3][4]. Summary by Sections Financial Performance - The company's operational profit in Hong Kong increased by 8% to HKD 9.251 billion in 2025, despite a 1% decline in electricity sales [2]. - The operational profit in mainland China decreased by 11%, primarily due to pricing pressures at the Yangjiang Nuclear Power Station and increased curtailment rates in renewable energy projects [2]. - The company’s free cash flow rose by 72% year-on-year to HKD 8.1 billion, driven by reduced capital expenditures [3]. Profit Forecast and Valuation - The report forecasts net profits of HKD 11.243 billion for 2026, HKD 11.920 billion for 2027, and HKD 12.464 billion for 2028, reflecting year-on-year growth rates of 7.4%, 6.0%, and 4.6% respectively [4][9]. - The estimated earnings per share (EPS) for 2026 is projected at HKD 4.45, with a price-to-book (PB) ratio of 1.91x for 2026 [4][9].