2024-05-09 23:32Investment Rating - The report maintains a "Buy" rating for Longyuan Power (00916 HK) with a target price of HK$7.75, based on a 7.5x P/E ratio for 2024 [2][3]. Core Insights - Short-term pressure on wind power generation is noted, but long-term growth potential remains promising due to a rich project reserve and gradual advancements in technology [2]. - The first quarter of 2024 showed revenue of RMB 9.88 billion, a slight increase of 0.1% year-on-year, with net profit reaching RMB 2.39 billion, up 2.5% [2]. - The increase in investment income significantly contributed to the earnings growth in Q1 2024, with a new installed capacity of 562 MW, including 26 MW from wind and 536 MW from solar [2]. - Wind power generation for Q1 2024 was 17 GWh, a modest increase of 1.4% year-on-year, impacted by a decrease in utilization hours [2]. Financial Summary - Revenue and net profit forecasts for 2024-2026 are projected at RMB 41.61 billion, RMB 7.97 billion; RMB 46.83 billion, RMB 9.46 billion; and RMB 50.64 billion, RMB 10.69 billion respectively [5][6]. - The earnings per share (EPS) is expected to grow from RMB 0.95 in 2024 to RMB 1.28 in 2026, reflecting a growth rate of 26.7% and 18.9% for the respective years [5][6]. - The company’s gross margin is projected to improve from 37.6% in 2024 to 39.0% in 2026, indicating operational efficiency [7]. Market Performance - The stock price performance shows a 2.9% increase over the past month and a 20.3% increase over the past three months, although it has decreased by 31.2% over the past year [4]. - The average share price over the last year was HK$6.5, with a current share price of HK$5.640 [3][4]. Operational Highlights - The company has a significant project reserve, with 54 GW of new resources added in 2023 and 23 GW of development indicators obtained [2]. - The report emphasizes the optimistic long-term growth outlook, particularly with the ongoing transition to larger, more efficient projects [2].