Summary of China Nuclear Power Conference Call Company Overview - **Company**: China Nuclear Power - **Industry**: Nuclear and Renewable Energy Key Points Financial Performance - In the first half of 2025, China Nuclear Power achieved revenue of **33.373 billion yuan**, a year-on-year increase of **6.54%** [2] - The net profit attributable to shareholders was **5.322 billion yuan**, up **9.48%** year-on-year [2] - The total electricity generated was **121.776 billion kWh**, with revenue from nuclear power reaching **40.973 billion yuan** [4] Nuclear Power Operations - The company currently operates **26 nuclear units** with a total installed capacity of **25 million kW** [4] - There are **18 units** under construction or approved for construction, with a combined capacity of **21.859 million kW** [2] - By 2031, the company expects to have a total operational capacity of **46.859 million kW**, representing an **87%** increase from current levels [2][5] Renewable Energy Business - As of June 30, 2025, the company had **33.2249 million kW** of renewable energy capacity in operation, including **10.3418 million kW** of wind and **22.8831 million kW** of solar [6] - The electricity generated from renewable sources was **21.915 billion kWh**, a **35.76%** increase year-on-year [6] - However, net profit from renewable energy dropped **66.28%** to **344 million yuan** due to regional power restrictions and increased depreciation costs [6] Market Dynamics - The average market price for renewable energy sales was approximately **0.28 yuan/kWh**, slightly down by **0.01 yuan/kWh** year-on-year [9] - The company anticipates stable electricity prices in Jiangsu province next year, with a gradual increase in market share [10] Cost Management - Uranium fuel costs are expected to remain stable between **60-80 USD** due to long-term contracts with suppliers [3][11] - The company has implemented cost control measures, which contributed to better-than-expected performance in net profit despite challenges [20] Strategic Planning - The company plans to focus on increasing wind power projects while reducing the scale of solar installations in its **15th Five-Year Plan** [4][14] - Following the implementation of Document 136, the company is optimizing project layouts and shifting focus from the northwest to the southeast coastal areas for better market conditions [16] Dividend Policy - The company maintains a mid-term dividend policy with a payout ratio of no less than **35%**, which is expected to gradually increase [23] - The dividend payout ratio for 2025 reached **41%**, with projections of **70-80%** if only existing units are operated [24] Challenges and Risks - Some renewable projects in the northwest are facing losses due to power restrictions and declining market prices, but overall losses are manageable [25] - The company is exploring solutions to address the issue of electricity transmission lagging behind power generation in the northwest region [19] Future Outlook - The capital expenditure for renewable energy is expected to remain stable but gradually decrease as projects are completed [17] - The company is preparing for the merger of its subsidiary, China Nuclear Huaneng, with Xinhua Hydropower, which is currently in the planning stage [13] This summary encapsulates the key insights from the conference call, highlighting the company's performance, strategic direction, and market conditions.

Core Viewpoint - Gansu Energy reported a slight increase in revenue and a significant rise in net profit for the first half of 2025, driven by strong performance in the hydropower and thermal power sectors, despite challenges in renewable energy pricing [1][2][3][4]. Group 1: Financial Performance - In H1 2025, Gansu Energy achieved revenue of 3.931 billion yuan, a year-on-year increase of 0.19%, and a net profit attributable to shareholders of 825 million yuan, up 16.87% year-on-year [1]. - Q2 2025 revenue was 1.692 billion yuan, down 0.73% year-on-year and 24.40% quarter-on-quarter, with net profit of 345 million yuan, reflecting a year-on-year increase of 1.16% but a quarter-on-quarter decrease of 28.04% [1]. - The hydropower segment saw a significant increase in on-grid electricity prices, up 39.99% year-on-year to 0.376 yuan/kWh, with a gross margin increase of 6.07 percentage points to 31.17% [1]. Group 2: Segment Performance - The thermal power segment showed strong results with on-grid electricity volume increasing by 5.46% year-on-year to 8.879 billion kWh and on-grid electricity price rising by 2.30% to 0.369 yuan/kWh [2]. - The net profit from the thermal power segment increased by 57.59% year-on-year to 1 billion yuan, with a calculated net profit per kWh of 0.113 yuan, up 3.7 cents year-on-year [2]. - The company anticipates further profit growth from the thermal power segment with the commissioning of new coal-fired units in the second half of 2025 [2]. Group 3: Renewable Energy Challenges - The company faced significant pressure in the wind and solar segments, with on-grid electricity prices decreasing by 33.80% and 17.17% year-on-year to 0.365 yuan/kWh and 0.3 yuan/kWh, respectively [3]. - The gross margins for wind and solar energy dropped by 30.41 and 12.75 percentage points to 27.45% and 23.77% [3]. - No new renewable energy installations were added in H1 2025, with approved capacities for wind and solar at 1.25025 million kW and 3.85 million kW, respectively [3]. Group 4: Profit Forecast and Valuation - The company revised down its net profit forecasts for 2025-2027 by 0.22%, 6.13%, and 7.48% to 1.895 billion yuan, 2.247 billion yuan, and 2.317 billion yuan, respectively [4]. - The downward revision is attributed to significant pressure on wind and solar electricity prices, with reductions of 27.58%, 28.13%, and 28.71% for wind and 14.21%, 14.63%, and 15.54% for solar over the same period [4]. - The target price was adjusted to 8.18 yuan based on a 14.0x 2025E PE, maintaining a "buy" rating [4].

Summary of Fuzhou Energy Co., Ltd. Conference Call Company Overview - **Company**: Fuzhou Energy Co., Ltd. (福能股份) - **Date**: Q2 2025 Conference Call Key Points Industry Insights - **Wind Power**: - Slightly poorer wind conditions in Fujian Province compared to the same period last year, but Q1 showed good wind conditions, leading to an expected annual wind power generation increase of approximately 20% [2][4] - **Thermal Power**: - Power generation from thermal sources decreased by approximately 200-300 million kWh from January to May 2025 due to weak electricity demand, but improvement is expected during the peak summer demand period [2][4][5] Financial Performance - **Coal Procurement**: - The price of coal has been declining, with the current price for standard coal (including tax) at 880-890 RMB/ton. The company plans to procure 1.3-1.4 million tons of long-term coal, with a high fulfillment rate in the first half of the year [2][6] - **Natural Gas Power Generation**: - Improved performance in natural gas power generation business, with the National Development and Reform Commission raising the natural gas grid price to 0.645 RMB/kWh retroactively effective from January 1, 2025 [2][7] - **Investment Returns**: - Good performance from equity investments, particularly from Huaneng Wenzhou thermal power project benefiting from lower coal prices, with expected investment returns higher than last year [2][8] Market Dynamics - **Desulfurization Trading**: - In Fujian Province, approximately 20%-30% of desulfurization projects participate in market trading annually under the old system. The average bidding price for land-based wind power desulfurization is 0.4136 RMB/kWh [2][9] - **Market Pricing for Wind Power**: - The minimum wind power price in Fujian is approximately 0.35 RMB/kWh, with expectations for stable pricing due to historical lack of consumption issues [2][10] Future Plans - **Dividend Policy**: - The company commits to a minimum of 10% mid-term dividend by the end of 2025, with an overall dividend ratio of at least 35%, higher than last year [2][20] - **Project Development**: - The company has significant offshore wind power reserves in Ningde, with plans for multiple projects including pumped storage projects and thermal power plants, expected to provide good cash flow [2][12][18] Additional Considerations - **Electricity Market Dynamics**: - In 2025, 80% of Fujian's electricity market transactions are long-term contracts, with 10% each for monthly and spot trading. The average price for long-term contracts is approximately 0.4441 RMB/kWh [2][16] - **Profitability Trends**: - The company reported a profit of 520 million RMB in Q1 2025, an increase of 280 million RMB year-on-year, despite some segments experiencing losses [2][19] This summary encapsulates the key insights and financial performance of Fuzhou Energy Co., Ltd. as discussed in the conference call, highlighting the company's strategic direction and market conditions.

Group 1: Company Overview and Future Plans - The company aims to exceed a total scale of 13.6 GW for operational, under construction, and planned power stations by the end of 2025, with projected revenue of CNY 5.26 billion and net profit not less than CNY 1.318 billion [2] - The company expects to add approximately 1.5 GW of new installed capacity in 2025, with total investment in photovoltaic power stations estimated at around CNY 6 billion, assuming a cost of CNY 4 per watt [3] Group 2: Market Performance - In 2024, the total electricity traded in the market was 3.283 billion kWh, an increase of 858 million kWh year-on-year, accounting for approximately 47.07% of the company's total sales volume [4] - The average market transaction price was approximately CNY 0.2172 per kWh, excluding subsidies [4] Group 3: Dividend Policy - Over the past three years, the company has distributed a total cash dividend of approximately CNY 1.512 billion, with a dividend payout ratio of about 36% of the average annual net profit attributable to shareholders [5] Group 4: Project Distribution and Acquisition Criteria - Current construction projects are primarily located in East China, Central China, North China, Xinjiang, and South China [6] - The company evaluates acquisition projects based on compliance, yield, and local consumption conditions, focusing on projects that meet compliance requirements, have suitable yields, and present lower risks [8]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company has shown steady growth in power generation, with a significant improvement in financial expenses [8][10] - The company aims to achieve a power generation target of 300 billion kWh in 2025, supported by favorable water resource conditions [10][15] - The company has increased its market-oriented trading volume, which is expected to enhance revenue and pricing [13][14] Summary by Relevant Sections Financial Performance - In 2024, the company achieved total revenue of 84,492 million yuan, a year-on-year increase of 8.12%, and a net profit attributable to shareholders of 32,496 million yuan, up 19.28% [9][10] - For Q1 2025, the company reported revenue of 17,015 million yuan, a growth of 8.68%, and a net profit of 5,181 million yuan, reflecting a 30.56% increase [9][10] - The company's financial expenses decreased significantly, contributing to higher profit growth rates compared to revenue growth [10][12] Operational Highlights - The total installed capacity of hydropower is 71,795 MW, with domestic hydropower accounting for 16.45% of the national total [10] - The company’s six hydropower stations generated 295.904 billion kWh in 2024, a 7.11% increase year-on-year [10][12] - The company has successfully implemented market-oriented pricing strategies, with the proportion of market transactions rising to 38.6% in 2024 [13][14] Future Outlook - The company has revised its profit forecasts for 2025-2027, projecting net profits of 35,028 million yuan, 36,715 million yuan, and 37,087 million yuan respectively, with growth rates of 7.8%, 4.8%, and 1.0% [15] - The expected dividend payout ratio for 2025 is 70%, translating to a dividend yield of 3.4% [15]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has shown steady growth in power generation, with financial expenses continuously improving. In 2024, the company achieved a total revenue of 84.49 billion yuan, a year-on-year increase of 8.12%, and a net profit attributable to shareholders of 32.50 billion yuan, a year-on-year increase of 19.28% [8][10] - The company aims to achieve a power generation target of 300 billion kWh in 2025, supported by favorable water resource conditions and improved market pricing [15] Summary by Relevant Sections Financial Performance - In 2024, the company reported total revenue of 84.49 billion yuan, up 8.12% year-on-year, and a net profit of 32.50 billion yuan, up 19.28% year-on-year. The first quarter of 2025 saw revenue of 17.02 billion yuan, a growth of 8.68%, and a net profit of 5.18 billion yuan, a growth of 30.56% [9][10] - The company's total installed hydropower capacity is 71.795 million kW, accounting for 16.45% of the national hydropower capacity. The six major hydropower stations generated 295.90 billion kWh in 2024, a year-on-year increase of 7.11% [10][12] Market Dynamics - The company has increased its market-based trading volume to 38.6% in 2024, up from 37.8% in 2023, with an average on-grid electricity price of 285.52 yuan/MWh, an increase of 4.24 yuan/MWh year-on-year [13][14] - The company is actively engaging in market-oriented pricing mechanisms, which are expected to enhance its competitive advantage in the clean energy sector [13] Profit Forecast and Valuation - The profit forecast for the company has been adjusted upwards, with net profit estimates for 2025, 2026, and 2027 set at 35.03 billion yuan, 36.72 billion yuan, and 37.09 billion yuan respectively, reflecting year-on-year growth rates of 7.8%, 4.8%, and 1.0% [15] - The current price-to-earnings ratio (P/E) is projected at 20.6 for 2025, with a dividend yield of 3.4% based on a 70% payout ratio [15]

Performance Overview - In Q1 2025, the company's subsidiaries achieved a total electricity generation of 452.18 billion kWh, a year-on-year increase of 14.06% [1] - Including the joint venture Hongyanhe Nuclear Power, total electricity generation reached 566.89 billion kWh, a year-on-year growth of 9.41% [1] - The company reported operating revenue of RMB 20.028 billion, an increase of 4.41% year-on-year [2] - The net profit attributable to shareholders was RMB 3.026 billion, a decrease of 16.07% year-on-year [2] - After excluding non-recurring gains and losses, the net profit attributable to shareholders was RMB 2.928 billion, down 15.94% year-on-year [2] Project Approvals and Management - As of April 27, 2025, the State Council approved five projects, including the Fangchenggang Units 5 and 6, and Taishan Units 3 and 4 [2] - The company currently manages 20 units under construction, including 8 units entrusted by the controlling shareholder, with overall project progress on track [2] Market and Pricing Insights - The market transaction ratio for nuclear power units managed by the company has increased, particularly in Guangdong, while units in Guangxi and Fujian have fully entered market transactions [3] - The average market transaction price for electricity in Guangdong province was RMB 0.37 per kWh, approximately 0.02 lower than the same period last year [3] - The market transaction price in Guangxi was around RMB 0.34 per kWh, while prices in Fujian and Liaoning remained stable compared to the previous year [3] Financial Challenges - The decline in net profit was attributed to increased market transaction ratios and a decrease in average market prices, which affected the gross profit from electricity sales [3] - The net cash flow from operating activities decreased year-on-year due to reduced payments received from projects and increased prepayments for nuclear fuel [3] Maintenance and Financing - In Q1 2025, the company conducted 6 major repairs, including 1 annual overhaul from 2024, completing 5 annual repairs and 1 ten-year overhaul, with a total of approximately 156 days of maintenance, a reduction of about 142 days compared to the previous year [3] - The average financing cost in Q1 2025 was 2.73%, down 30 basis points from the 3.03% recorded for the entire year of 2024 [3]