BOCOM International·2026-03-25 03:35Investment Rating - The report maintains a "Buy" rating for China Power (2380 HK) with a target price of HKD 3.75, indicating an expected upside of 18.7% from the current price [4][8]. Core Insights - The company is focusing on balanced growth in installed capacity during the 14th Five-Year Plan, with an emphasis on shareholder returns [1]. - Despite a 13.5% year-on-year decline in profit for 2025, the company increased its final dividend by 3.7% to CNY 0.168 per share, raising the payout ratio to 70% [4]. - The company aims to increase the proportion of wind power installations while reducing solar power installations to below 30% by the end of the 14th Five-Year Plan [3]. Summary by Sections Financial Performance - For 2025, the company's revenue is projected to decline by 9.6% to CNY 49.03 billion, with operating profit decreasing by 1.9% to CNY 11.94 billion [5]. - The company expects to recover approximately CNY 6 billion in subsidies, a year-on-year increase of about CNY 4 billion, while capital expenditures are anticipated to decrease by CNY 10 billion [4]. - The overall limit electricity rate is around 9%, with wind and solar power limit rates at approximately 9% and 10.5%, respectively [4]. Operational Strategy - The company plans to add 6.2 GW of wind and solar capacity in 2025, with a focus on optimizing installation structure and regional layout [4]. - The management anticipates that the electricity supply situation will gradually improve with continued investments in ultra-high voltage and main grid infrastructure by the State Grid [4]. - The company aims for a full investment return requirement of 7.5%-9.5% for new wind and solar projects, with higher requirements in regions with severe electricity restrictions [3]. Segment Performance - The operating profit for thermal power is expected to increase by 4.9% to CNY 2.88 billion, while wind power profit is projected to decline by 10.6% to CNY 5.03 billion [6]. - The solar power segment is expected to see a significant drop in operating profit by 16.9% to CNY 3.07 billion [6]. - The storage business is projected to grow significantly, with an increase of 108.2% in operating profit [6].