Core Viewpoint - Huadian International (01071) reported a mixed financial performance for the first three quarters of 2025, with a decline in revenue but an increase in net profit, leading to a positive market reaction with a stock price increase of over 4% [1] Financial Performance Summary - For the first three quarters, the company achieved revenue of 95.872 billion yuan, a year-on-year decrease of 9.72% [1] - The net profit attributable to shareholders was 6.437 billion yuan, reflecting a year-on-year increase of 15.87% [1] - In the third quarter alone, the company reported revenue of 35.920 billion yuan, down 10.92% year-on-year [1] - The net profit for the third quarter was 2.533 billion yuan, showing a year-on-year increase of 20.32% [1] Market and Operational Insights - According to Shenwan Hongyuan, the decline in electricity generation has narrowed in the third quarter, and electricity prices have remained relatively stable [1] - The company is expected to see a continuous improvement in profit per unit of thermal power generation, as the reduction in costs outpaces the decline in electricity prices [1] - With improvements in both the marginal profitability and overall profitability of thermal power generation, the company's performance is expected to stabilize and recover [1]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price not specified [5] Core Views - The company's revenue for the first half of 2025 reached 4.357 billion yuan, a year-on-year increase of 17.33%, with a net profit attributable to shareholders of 559 million yuan, up 52.62% year-on-year [1] - The decline in coal prices has significantly improved the company's cost structure, leading to a substantial increase in profitability in Q2 2025 [2] - The company is progressing well with new projects, indicating considerable potential for future installed capacity growth [3] - The adjustment of capacity pricing in Guangdong province is expected to stabilize the profitability of thermal power generation [4] Revenue and Profitability - In Q2 2025, the company's revenue was 2.377 billion yuan, a 49.81% increase year-on-year, with a net profit of 259 million yuan, reflecting a 60.51% year-on-year growth [1][2] - The average coal price in Qinhuangdao for Q2 was approximately 632 yuan per ton, down about 217 yuan per ton year-on-year, contributing to improved margins [2] Project Development - As of the end of 2024, the company had a total installed capacity of 3.47 million kilowatts, with ongoing expansion projects that could significantly increase this capacity in the future [3] Financial Forecasts - The adjusted net profit forecasts for 2025, 2026, and 2027 are 962.22 million yuan, 1.08052 billion yuan, and 1.12285 billion yuan, respectively, with year-on-year growth rates of 36.38%, 12.29%, and 3.92% [4] - The report projects a price-to-earnings ratio (P/E) of 10.63 for 2025, 9.46 for 2026, and 9.11 for 2027 [4]