Core Viewpoint - Huaneng Lancang River Hydropower Co., Ltd. has achieved impressive financial results for 2024 and Q1 2025, positioning itself as a leader in the hydropower industry [2][3] Financial Performance - In 2024, the company reported operating revenue of 24.882 billion yuan, a year-on-year increase of 6.05%, and a net profit attributable to shareholders of 8.297 billion yuan, up 8.63% [2] - For Q1 2025, the company continued its strong growth with operating revenue of 5.385 billion yuan, a year-on-year increase of 21.84%, and a net profit of 1.508 billion yuan, up 41.56% [2] - The company plans to distribute a cash dividend of 2 yuan per share for 2024, totaling 3.6 billion yuan, marking an 11.11% increase [2] Operational Highlights - By the end of 2024, the company had a total installed hydropower capacity of 27.3058 million kilowatts, with significant contributions from major hydropower stations [3] - The total hydropower generation for 2024 reached 107.93 billion kilowatt-hours, reflecting a year-on-year growth of 2.53% [3] - The company has embraced digital transformation, significantly shortening construction periods and reducing costs, exemplified by the early commissioning of the TB hydropower station [3] Future Development - Huaneng is accelerating the development of the integrated water-wind-solar base project in the upper reaches of the Lancang River, which has been included in the first batch of national large-scale demonstration bases [4] - The company is actively expanding into renewable energy, with approved capacity for new energy projects reaching 9.69 million kilowatts, and significant growth in installed capacity and generation from wind and solar projects [5][6] - The Nagu Photovoltaic Power Station, located at high altitude, showcases the company's innovative approach and is expected to generate an average annual output of 158 million kilowatt-hours [6]

Investment Rating - The investment rating for the company is "Buy" and is maintained [9]. Core Insights - The company achieved a revenue growth of 1.95% in 2024, with total revenue reaching 57.819 billion yuan, while the net profit attributable to shareholders decreased by 0.92% to 6.643 billion yuan. In Q1 2025, revenue was 13.122 billion yuan, a decrease of 6.99%, but net profit attributable to shareholders increased by 2.1% to 2.078 billion yuan [6][2]. - The company's operational performance is supported by a significant reduction in costs, with total operating costs decreasing by 0.75% in 2024 and a further decline of 11.79% in Q1 2025, benefiting from lower coal prices and interest rates [2][11]. - The company is focusing on cost reduction strategies to ensure performance growth despite weak revenue due to price declines and volume pressures in the energy market [11][6]. Summary by Sections Financial Performance - In 2024, the company reported total revenue of 57.819 billion yuan, with a net profit of 6.643 billion yuan. The first quarter of 2025 saw a revenue of 13.122 billion yuan and a net profit of 2.078 billion yuan [6][2]. - The company’s total installed capacity reached 44.6347 million kilowatts, with clean energy accounting for over 70% of the total capacity [11]. Cost Management - The company actively reduced costs, achieving a decrease in total operating costs by 0.75% in 2024 and 11.79% in Q1 2025. Financial expenses were reduced by 14.17% [2][11]. - The average on-grid electricity price in 2024 was 0.359 yuan/kWh, a decrease of 4.01% year-on-year, influenced by changes in energy mix and pricing mechanisms [11]. Future Outlook - The company is expected to see EPS of 0.92 yuan, 1.04 yuan, and 1.11 yuan for 2024, 2025, and 2026 respectively, with corresponding PE ratios of 16.45, 14.64, and 13.67 [11][6]. - The ongoing development of the Yalong River integrated water-wind-solar base is anticipated to enhance the company’s growth potential, with a total of 30 million kilowatts of hydropower capacity available for development [11].

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company reported a stable performance in Q1 2025, with a significant increase in hydropower generation, while thermal power faced short-term pressure due to various factors [7] - The company plans to distribute a cash dividend of 0.4565 CNY per share for the fiscal year 2024, resulting in a dividend yield of 3.06% based on the stock price as of May 6, 2025 [7] - The overall revenue for 2024 was 578.19 billion CNY, with a slight year-on-year increase of 1.95%, while the net profit attributable to the parent company was 66.43 billion CNY, a decrease of 0.92% [7] Financial Performance Summary - In Q1 2025, the company achieved total revenue of 13.12 billion CNY, a year-on-year decline of 6.99%, while the net profit attributable to the parent company was 2.08 billion CNY, an increase of 2.01% [6][7] - The company's hydropower generation in 2024 was 1040.85 billion kWh, a year-on-year increase of 10.49%, with Q1 2025 showing a 17.96% increase in hydropower generation [7] - The average on-grid electricity price for hydropower in 2024 was 0.291 CNY/kWh, a decrease of 3.00% year-on-year [7] - The company's thermal power generation in 2024 was 529.02 billion kWh, a year-on-year decrease of 3.04%, with Q1 2025 showing a significant decline of 32.70% [7] - The company added 263.16 MW of new renewable energy capacity in 2024, with a total on-grid electricity generation of 111.27 billion kWh, a year-on-year increase of 20.24% [7] Profit Forecast and Valuation - The forecast for net profit attributable to the parent company for 2025 and 2026 has been adjusted to 72.01 billion CNY and 76.42 billion CNY, respectively, with a new estimate for 2027 at 82.00 billion CNY [7] - The current stock price corresponds to price-to-earnings ratios of 17, 16, and 15 for the years 2025, 2026, and 2027, respectively [7]

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of 11.48 RMB [7][10]. Core Views - The company reported a revenue of 24.882 billion RMB in 2024, representing a year-on-year increase of 6.05%, and a net profit attributable to shareholders of 8.297 billion RMB, up 8.63% year-on-year [1][2]. - In Q1 2025, the company achieved a revenue of 5.385 billion RMB, a year-on-year increase of 21.84%, and a net profit of 1.508 billion RMB, up 41.56% year-on-year, primarily due to increased energy storage release and the full capacity operation of TB hydropower station [1][2]. - The company’s dividend per share (DPS) for 2024 is 0.2 RMB, with a payout ratio of 43.39%, reflecting a year-on-year increase of 0.97 percentage points [1]. Summary by Sections Financial Performance - The company's on-grid electricity volume increased by 4.51% year-on-year to 1,110.24 billion kWh in 2024, driven by favorable water conditions and increased photovoltaic capacity [2]. - The average on-grid electricity price (excluding tax) for 2024 is estimated at 0.222 RMB/kWh, a rise of 0.02 RMB/kWh year-on-year, attributed to the growth in market prices for clean energy in Yunnan province [2]. Q1 2025 Insights - The comprehensive on-grid electricity price (excluding tax) for Q1 2025 is estimated to have decreased by 0.02 RMB/kWh to 0.255 RMB/kWh, influenced by market price changes and the structure of electricity volume [3]. - The company’s electricity volume from lower-priced hydropower stations increased significantly, which affected the overall pricing structure [3]. Valuation and Forecast - The target price of 11.48 RMB is based on a revised PE ratio of 24.0x for 2025, reflecting a decrease from the previous target price of 11.82 RMB [4]. - The forecasted net profit for 2025 is adjusted down by 2.9% to 8.608 billion RMB, with further projections for 2026 and 2027 showing net profits of 9.342 billion RMB and 9.673 billion RMB, respectively [4][6].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 11.48 RMB [4][7]. Core Views - The company achieved a revenue of 24.882 billion RMB in 2024, a year-on-year increase of 6.05%, and a net profit attributable to shareholders of 8.297 billion RMB, up 8.63% year-on-year [1][6]. - In Q1 2025, the company reported a revenue of 53.85 million RMB, reflecting a year-on-year growth of 21.84%, and a net profit of 15.08 million RMB, which is a significant increase of 41.56% year-on-year [1][3]. - The company is expected to benefit from the integrated development of hydropower, wind power, and solar energy, which is anticipated to enhance long-term value [4][6]. Summary by Sections Financial Performance - The company's electricity generation increased by 4.51% to 1110.24 billion kWh in 2024, driven by favorable water conditions and increased solar capacity [2]. - The average on-grid electricity price (excluding tax) for 2024 is estimated at 0.222 RMB/kWh, a rise of 2 cents compared to the previous year [2]. - The company’s financial expenses decreased by 2.04% year-on-year in 2024 [2]. Q1 2025 Insights - The comprehensive on-grid electricity price (excluding tax) for Q1 2025 is estimated to have decreased by 2 cents to 0.255 RMB/kWh, influenced by market price changes and electricity volume structure [3]. - The company’s electricity generation from lower-priced hydropower stations increased significantly, which may support overall pricing despite anticipated market price declines [3]. Valuation and Forecast - The target price of 11.48 RMB is based on a projected PE ratio of 24.0x for 2025, reflecting a downward adjustment from the previous target of 11.82 RMB [4]. - The forecasted net profit for 2025 is adjusted to 8.608 billion RMB, a decrease of 2.9% from previous estimates [4][6].