Investment Rating - The investment rating for the company is "Buy" (maintained) [7] Core Views - The company's performance in H1 2025 met expectations, with a significant improvement in Q2 profitability for electrolytic aluminum [5][14] - The company achieved a revenue of 20.43 billion yuan in H1 2025, a year-on-year increase of 12.12%, while the net profit attributable to shareholders was 1.904 billion yuan, a year-on-year decrease of 16.62% [13] - In Q2 2025, the company reported a net profit of 1.196 billion yuan, a year-on-year increase of 0.22% and a quarter-on-quarter increase of 68.89% [13] Summary by Sections Financial Performance - In H1 2025, the company sold 871,400 tons of aluminum products, a year-on-year increase of 16.26%, primarily due to increased sales from Yunnan Shenhuo electrolytic aluminum [5][14] - The sales gross margin for Q2 2025 was 24.41%, a year-on-year decrease of 1.10 percentage points but a quarter-on-quarter increase of 9.48 percentage points [5][15] - The company’s coal sales volume in H1 2025 was 3.7275 million tons, a year-on-year increase of 18.31% [5][16] Price Trends - The price of alumina has significantly decreased, leading to improved profitability for electrolytic aluminum [5][15] - The average price of electrolytic aluminum in H1 2025 was 20,300 yuan per ton, a year-on-year increase of 2.6%, while the average price of alumina was 3,460 yuan per ton, a year-on-year decrease of 1.4% [5][15] Profitability Outlook - The company expects net profits for 2025-2027 to be 5.257 billion, 6.708 billion, and 7.214 billion yuan respectively, with year-on-year growth rates of 22.06%, 27.61%, and 7.54% [17] - The current stock price corresponds to a price-to-earnings ratio (P/E) of 8.2 for 2025, 6.5 for 2026, and 6.0 for 2027 [17][18]

Core Viewpoint - Electric Power Investment Energy plans to acquire 100% equity of Baiyinhu Coal Power from State Power Investment Corporation Inner Mongolia, which is expected to significantly enhance the company's asset scale and business strength [1][3]. Group 1: Acquisition Details - The acquisition will be conducted through a combination of issuing shares and cash payments, with specific transaction prices yet to be determined as the audit and evaluation of the target assets are still ongoing [1][2]. - The transaction is classified as a major asset restructuring and related party transaction [1]. - Baiyinhu Coal Power has shown strong performance, with projected revenue of 11.402 billion yuan and net profit of 1.396 billion yuan for 2024 [1][3]. Group 2: Financial Performance - Baiyinhu Coal Power's revenue for 2023, 2024, and Q1 2025 is reported at 7.362 billion yuan, 11.402 billion yuan, and 2.911 billion yuan, respectively, with corresponding net profits of 543 million yuan, 1.396 billion yuan, and 430 million yuan [3]. - Electric Power Investment Energy's total assets, net assets, and operating income are expected to increase significantly post-acquisition, improving the overall asset quality and profitability of the company [3]. Group 3: Company Background and Business Segments - Electric Power Investment Energy was established in 2001 and has been listed on the Shenzhen Stock Exchange since 2007, rapidly entering the thermal power and electrolytic aluminum sectors through acquisitions [4]. - The company has experienced steady growth in revenue and net profit for four consecutive years, with 2024 revenue reaching 29.859 billion yuan and net profit at 5.342 billion yuan, reflecting year-on-year growth rates of 11.23% and 17.15%, respectively [5]. - The company's business segments include electrolytic aluminum, coal, thermal power, and renewable energy, with revenue contributions of 52.46%, 34.14%, 5.8%, 4.48%, and 0.99% respectively [5]. Group 4: Recent Financial Trends - In Q1 2025, Electric Power Investment Energy reported revenue of 7.537 billion yuan, a year-on-year increase of 2.63%, while net profit decreased by 19.82% to 1.559 billion yuan due to rising operating costs [6]. - Despite the decline in net profit, the company's financial position remains stable, with a net operating cash flow of 1.766 billion yuan, up 31.06% year-on-year, and a debt-to-asset ratio of 24.14%, which has decreased by over 1 percentage point since the beginning of 2025 [6].

Group 1 - The company plans to acquire 100% equity of Baiyinhu Coal Power Co., Ltd. from its actual controller, State Power Investment Corporation, through a combination of share issuance and cash payment [2] - The transaction is expected to significantly increase the company's asset scale and business strength, enhancing key financial metrics such as total assets, net assets, and operating income [2] - The issuance price for the shares is set at 15.57 yuan per share, which is not less than 80% of the average trading price over the last 120 trading days prior to the pricing date [2] Group 2 - Prior to the transaction, Baiyinhu Coal Power will transfer its stakes in several companies to State Power Investment Corporation, and a simulated financial report will be prepared based on the transferred asset scope [3] - The projected operating revenues for Baiyinhu Coal Power are 7.362 billion yuan, 11.402 billion yuan, and 2.911 billion yuan for 2023, 2024, and Q1 2025, respectively [3] - The company holds mining rights for the Baiyinhu No. 2 open-pit mine with a coal production capacity of 15 million tons per year, primarily producing lignite [3] Group 3 - Baiyinhu Coal Power has established a comprehensive development model integrating coal, electricity, and aluminum, with a total coal production capacity of 15 million tons per year and 262,000 kilowatts of thermal power capacity [4] - The company benefits from cost advantages in coal and abundant electricity resources, creating synergies in the coal-electricity-aluminum business sector [4] - This integration reduces external coal sales pressure, lowers transportation costs, and minimizes pollution, while also decreasing production energy consumption and costs [4]

Investment Rating - The investment rating for the company is "Buy" with a target price not specified [7]. Core Views - The company achieved stable revenue growth in 2024, with operating income reaching 29.859 billion yuan, a year-on-year increase of 11.23%, and a net profit attributable to shareholders of 5.342 billion yuan, up 17.15% [1]. - The coal and power integration business remains profitable, with coal sales prices increasing against the trend, supporting overall revenue growth [2]. - The aluminum price has increased year-on-year, leading to a recovery in the electrolytic aluminum segment's performance [3]. - There is significant growth potential across various segments, including coal, electrolytic aluminum, and renewable energy [4]. Summary by Sections Financial Performance - In 2024, the company reported operating income of 29.859 billion yuan, a growth rate of 11.23%, and a net profit of 5.342 billion yuan, reflecting a 17.15% increase [5]. - For Q1 2025, the company recorded operating income of 7.537 billion yuan, a year-on-year increase of 2.63%, but a net profit decrease of 19.82% to 1.559 billion yuan [1]. Coal and Power Segment - The company generated 55.28 billion kWh of electricity in 2024, a decrease of 1.38%, with a tax-inclusive on-grid electricity price of 0.344 yuan/kWh, down 2.67% [2]. - Coal production reached 47.996 million tons, a year-on-year increase of 3.11%, with coal prices rising to 213 yuan/ton, up 9% [2]. Aluminum Segment - The company produced 900,000 tons of electrolytic aluminum in 2024, a 2.85% increase, with an average domestic aluminum price of 19,922 yuan/ton, up 6.53% [3]. - The electrolytic aluminum segment achieved operating income of 15.663 billion yuan, a 9.51% increase, and a gross profit of 2.769 billion yuan, up 24.86% [3]. Growth Potential - The company is positioned as the sole platform for coal, thermal power, and electrolytic aluminum resource integration in Inner Mongolia, with potential asset injections from the parent group [4]. - The company is advancing the Zhahe No. 2 project for green aluminum, which will increase capacity by 40.7% [4]. - By the end of 2024, the company's renewable energy capacity reached 5.0076 million kW, a 10.01% increase, with ongoing projects expected to further enhance capacity [4]. Profit Forecast and Valuation - The profit forecast for 2025-2027 is adjusted to 5.649 billion, 6.057 billion, and 6.218 billion yuan, reflecting year-on-year increases of 5.76%, 7.22%, and 2.66% respectively [4]. - The corresponding price-to-earnings ratios are projected at 7.08, 6.61, and 6.43 times [4].

Core Viewpoint - The company has a strong integrated coal-electricity-aluminum business model with strategic advantages in Xinjiang, Yunnan, and Henan, indicating medium to long-term growth potential [1] Group 1: Electrolytic Aluminum Business - The company has established a competitive advantage with 800,000 tons/year capacity in Xinjiang and 900,000 tons/year in Yunnan, achieving significant cost advantages [2] - Xinjiang's production is stable with self-sufficient power covering 90% of electricity needs, while Yunnan benefits from high green electricity ratios and low electricity prices during peak water periods [2] Group 2: Coal Business - The company operates in a key coal production area with a total capacity of 8.55 million tons/year, maintaining strong profitability despite rising costs [2] - The average selling price of coal is projected to be around 1,020 RMB/ton in 2024, with production expected to recover to 7.2 million tons in 2025 [2] Group 3: Aluminum Foil Business - The company has a total aluminum foil capacity of 140,000 tons/year and is expanding with an additional 110,000 tons/year under construction, showcasing competitive advantages in technology and environmental standards [3] - In 2024, the aluminum foil sales volume reached 69,600 tons, generating revenue of 4.015 billion RMB, with a net profit of 64 million RMB [3] Group 4: Investment Recommendations - The company is expected to benefit from the industry's trend towards environmental protection and carbon reduction, with projected net profits of 4.92 billion RMB, 6.01 billion RMB, and 6.41 billion RMB for 2025-2027 [4] - The company is rated as a "buy" based on its integrated business model and growth prospects [4]