Core Viewpoint - The company maintains a "buy" rating, projecting a target price of HKD 3.63 based on a 11.5x PE for 2025, supported by expected integration of hydropower assets and a current dividend yield of over 5% [1] Financial Performance - For the first half of 2025, the company reported a revenue of CNY 23.9 billion, a year-on-year decrease of 10% - The profit attributable to equity holders was CNY 2.83 billion, up 1.2% year-on-year, while the profit attributable to ordinary shareholders was CNY 2.59 billion, an increase of 0.65% year-on-year [1] Segment Analysis - **Thermal Power**: Net profit of CNY 1.43 billion, an increase of CNY 320 million year-on-year, with a profit per kWh of CNY 0.058, up CNY 0.019. The coal power price decreased by CNY 0.019 to CNY 0.373, while fuel costs dropped by CNY 0.039 to CNY 0.235 (corresponding to a decrease of approximately CNY 118 per ton of standard coal) [1] - **Hydropower**: Net profit of CNY 550 million, down CNY 220 million year-on-year, with a profit per kWh of CNY 0.067, down CNY 0.005, primarily due to a decrease in utilization hours by 434 to 1387 hours [1] - **Wind Power**: Net profit of CNY 2.12 billion, an increase of CNY 160 million year-on-year, with a profit per kWh of CNY 0.127, down CNY 0.022. The electricity price decreased by CNY 0.036 to CNY 0.411, while utilization hours increased by 56 to 1122 hours [1] - **Photovoltaics**: Net profit of CNY 720 million, down CNY 420 million year-on-year, with a profit per kWh of CNY 0.055, down CNY 0.041. The electricity price decreased by CNY 0.024 to CNY 0.377, and utilization hours decreased by 73 to 665 hours [1] Future Projections - For 2025, the company expects thermal power net profit to reach CNY 2.03 billion, a year-on-year increase of CNY 500 million, assuming a coal price decrease of CNY 100 per ton and a maintained electricity price drop of 2 cents - Combined net profits from hydropower, wind power, and photovoltaics are projected to be CNY 5.2 billion, a decrease of CNY 200 million year-on-year, with expected utilization hours adjusted accordingly [2]

Investment Rating - The report maintains a "Buy" rating for China Power (2380) [6][10]. Core Views - The company is expected to benefit from the recovery in thermal and wind power, compensating for the decline in hydropower and photovoltaic segments. The report anticipates a profit of 25.9 billion RMB attributable to ordinary shareholders for the first half of 2025, reflecting a year-on-year increase of 0.65% [2][10]. Financial Summary - Total revenue for 2023 is projected at 47.058 billion RMB, with a year-on-year growth of 5.3%. The revenue is expected to reach 54.213 billion RMB in 2024, followed by a decline to 50.610 billion RMB in 2025, and then a recovery to 53.830 billion RMB in 2026 and 56.813 billion RMB in 2027 [4]. - Gross profit is forecasted to increase from 5.739 billion RMB in 2023 to 9.893 billion RMB in 2025, with net profit expected to rise from 2.660 billion RMB in 2023 to 3.607 billion RMB in 2025 [4]. - The report estimates the company's PE ratio to decrease from 12.3 in 2023 to 9.9 in 2025, indicating a potential undervaluation [4]. Segment Performance - Thermal power is expected to see a net profit of 20.3 billion RMB in 2025, a year-on-year increase of 5 billion RMB, driven by a slight rebound in coal prices [10]. - Wind power is projected to achieve a net profit of 21.2 billion RMB, with an increase in utilization hours contributing positively [10]. - Hydropower and photovoltaic segments are expected to face challenges, with net profits of 5.5 billion RMB and 7.2 billion RMB respectively, reflecting declines due to reduced utilization hours [10]. Valuation and Target Price - The report suggests a target price of 3.63 HKD for the stock, based on a PE ratio of 11.5 for 2025, which reflects a premium valuation due to the anticipated integration of hydropower assets [10][12].

Core Viewpoint - The report outlines the acquisition of Yuanda Environmental Protection Co., Ltd. by China Power International Development Limited, emphasizing the strategic integration of hydropower assets and the enhancement of core competitiveness within the clean energy sector [1][5]. Group 1: Acquisition Details - The acquisition involves China Power purchasing 63% of Wuling Power and 64.93% of Changzhou Hydropower from Yuanda Environmental Protection, with the aim of establishing a hydropower asset integration platform [4][19]. - Post-acquisition, China Power will become the controlling shareholder of Yuanda Environmental Protection, while the actual controller remains the State Power Investment Corporation [19][25]. Group 2: Financial Overview - China Power's total assets as of December 31, 2024, are reported at approximately RMB 34.05 billion, with total liabilities of about RMB 23.29 billion, resulting in an equity of around RMB 10.75 billion [8]. - The financial performance for China Power shows a revenue increase to RMB 5.42 billion in 2024, up from RMB 4.43 billion in 2023, indicating a growth rate of approximately 22.5% [8][12]. Group 3: Strategic Intent - The acquisition is part of a broader strategy to enhance the competitiveness of the State Power Investment Corporation, which is recognized as the largest clean energy company globally [5][12]. - The transaction aims to integrate hydropower and renewable energy operations, thereby expanding Yuanda Environmental Protection's business scope to include comprehensive development and operation of hydropower stations [5][22]. Group 4: Management and Governance - China Power's management team possesses extensive experience in corporate governance and is well-versed in the regulatory environment of the securities market, ensuring compliance and effective management post-acquisition [9][18]. - The State Power Investment Corporation, as a controlling entity, has committed to maintaining the independence of Yuanda Environmental Protection in terms of operations and governance [25][27]. Group 5: Future Plans - Following the acquisition, there are no immediate plans for significant changes to the operational structure or management of Yuanda Environmental Protection, ensuring stability during the transition [21][22]. - The acquisition is expected to enhance shareholder value, with plans to increase the dividend payout ratio to no less than 50% post-transaction [22][27].

Group 1 - The company's total electricity sales volume for the first four months of 2025 increased by 0.33% year-on-year, with hydroelectric power decreasing by 17.1%, wind power increasing by 32.13%, photovoltaic power increasing by 13.57%, and coal-fired power decreasing by 14.22% [1] - In April, the consolidated total electricity sales volume decreased by 5.94% year-on-year, with hydroelectric power decreasing by 53.33%, wind power increasing by 37.48%, photovoltaic power increasing by 9.96%, and coal-fired power decreasing by 13.54% [1] - The integration of hydroelectric assets is progressing smoothly, with China Power expected to hold a 55.13% stake in Yuanda Environmental Protection after the transaction, ensuring long-term control over the company [1] Group 2 - The company has a commitment to a dividend payout ratio of no less than 50%, with a projected dynamic dividend yield of approximately 6% for 2025 [2] - The company aims to increase the dividend payout ratio of Yuanda Environmental Protection to no less than 50% [2] - A target price of HKD 3.9 per share has been set, corresponding to a 10x PE and 0.9x PB for 2025, indicating a potential upside of 22% from the current price [2]

Core Viewpoint - The company shows steady revenue growth, significant improvement in non-recurring profit, and substantial enhancement in operating cash flow [3] Financial Performance - In 2024, the company achieved operating revenue of 4.722 billion yuan, a year-on-year increase of 11%, while net profit attributable to shareholders was 36 million yuan, a year-on-year decrease of 33% [1] - In Q1 2025, the company reported operating revenue of 879 million yuan, a year-on-year increase of 4%, and net profit attributable to shareholders of 40 million yuan, a year-on-year increase of 27% [2] - The non-recurring net profit for 2024 reached 18 million yuan, a significant year-on-year increase of 630%, indicating enhanced profitability from core operations [3] Business Segment Performance - The catalyst business achieved operating revenue of 532 million yuan in 2024, a year-on-year increase of 25%, with profits of 46.56 million yuan, a substantial increase of 40.2 million yuan [4] - The environmental engineering business reported operating revenue of 1.568 billion yuan, a year-on-year increase of 31%, but with a decline in gross margin by 4.23 percentage points to 2.44% [4] - The desulfurization and denitrification concession business generated operating revenue of 2.242 billion yuan, a year-on-year increase of 1%, with a slight increase in gross margin by 0.52 percentage points to 15.31% [4] - The water business achieved operating revenue of 777 million yuan, a year-on-year increase of 12%, with a gross margin of 32.12% [4] Strategic Initiatives - The company initiated a major asset restructuring in 2024, aiming to transform into a hydropower asset integration platform by acquiring 100% equity of Wuling Power and 64.93% equity of Changzhou Hydropower [5] - The restructuring is expected to significantly alter the company's main business structure and asset scale, enhancing core competitiveness [5] Profit Forecast - The company forecasts operating revenues of 5.019 billion yuan, 5.327 billion yuan, and 5.601 billion yuan for 2025-2027, representing year-on-year growth rates of 6.29%, 6.12%, and 5.15% respectively [5] - Net profit attributable to shareholders is projected to be 89 million yuan, 107 million yuan, and 119 million yuan for the same period, with year-on-year growth rates of 147.51%, 20.01%, and 11.74% respectively [5]