Group 1: Industry Impact and Technological Developments - The "New Generation Coal Power Upgrade Special Action Implementation Plan (2025-2027)" aims to enhance coal power technology indicators, promoting upgrades and new constructions to improve carbon emission levels and operational efficiency [2][3] - The company has entered the molten salt energy storage sector, completing a project that enhances peak regulation capabilities for thermal power units [3] - Key carbon reduction technologies include biomass co-firing, green ammonia (hydrogen), and carbon capture, utilization, and storage, with ongoing challenges in technology breakthroughs and economic viability [5] Group 2: Operational Efficiency and Cost Management - New coal power units can utilize ultra-supercritical technology to reduce coal consumption, while existing units require upgrades in heat recovery, energy storage, and intelligent monitoring to lower overall coal consumption [4] - The company anticipates that sales-related transactions with the State Energy Group will continue to represent a significant portion (83.61%) of its business, reflecting ongoing support for key technology projects [6] Group 3: Market Dynamics and Regulatory Environment - The recent notice on market-oriented pricing reforms for renewable energy will impact the thermal power sector, leading to reduced operating hours and increased pressure on pricing and environmental compliance [7][8] - By the end of 2024, installed renewable energy capacity is expected to surpass that of thermal power, necessitating a shift in thermal power units from primary to regulatory sources [8] Group 4: Shareholder Engagement and Financial Strategy - The company emphasizes cash dividends as a means to reward shareholders, aligning with regulatory encouragement and balancing business growth with shareholder returns [8]

Investment Rating - The report maintains an "Outperform" rating for the company [2] Core Views - The company reported a revenue of 91.13 billion yuan in 2024, a year-on-year decrease of 13.3%, and a net profit attributable to shareholders of 7.04 billion yuan, down 5.0% year-on-year. The first quarter of 2025 saw revenues of 19.65 billion yuan, a decline of 32.3%, and a net profit of 1.29 billion yuan, down 30.8% year-on-year. The performance was below expectations due to a decline in engineering business and reduced investment income from a stake in Gaojia Solar Energy [7] - The company's thermal power and environmental operations remain stable, with thermal power revenue reaching 45.99 billion yuan in 2024, up 15.59% year-on-year, primarily due to the acquisition of three thermal power plants in mid-2023. Environmental operations generated 6.38 billion yuan in revenue, a 5.50% increase year-on-year [7] - Engineering business has seen a significant decline, with power station engineering revenue dropping to 6.75 billion yuan, down 70% year-on-year, and environmental engineering revenue falling to 13.1 billion yuan, down 37.59% year-on-year. The decline in photovoltaic power station engineering is attributed to volatile component prices and increased uncertainty in project returns [7] - The company has stabilized its coal powder preheating technology, which features a wide load range and low NOx emissions. The technology has achieved stable operation at 20% low load and has flexible load adjustments from 0-110%, with NOx emissions reduced by 40% compared to pre-modification levels [7] - Hydrogen energy projects are expected to contribute to profit growth, with the company completing a 500MW hydrogen production equipment production base and securing contracts for hydrogen production equipment and systems [7] - The company plans to maintain a high dividend payout ratio of 61% for 2024, with a current dividend yield of 4.9% [7] - Profit forecasts have been adjusted downward due to pressure on engineering business and reduced investment income, with net profit estimates for 2025 and 2026 revised to 7.23 billion yuan and 7.63 billion yuan, respectively [7] Financial Data and Profit Forecast - Total revenue for 2024 is projected at 91.13 billion yuan, with a year-on-year decrease of 13.3%. The net profit attributable to shareholders is expected to be 7.04 billion yuan, down 5.0% year-on-year. For 2025, the estimated revenue is 109.77 billion yuan, with a growth rate of 20.5% [6][10] - The company’s gross profit margin is expected to stabilize at 21.0% from 2025 to 2027, with a return on equity (ROE) projected to increase from 7.9% in 2025 to 8.6% in 2027 [6][10] - The price-to-earnings (PE) ratio is estimated at 12 for 2025, with a potential upside of 16% based on current market valuation [7][8]