Core Viewpoint - Longyuan Carbon Asset Management Technology Co., Ltd. is a wholly-owned subsidiary of China Energy Group, focusing on carbon asset management and digital transformation in line with China's dual carbon goals [1][4]. Group 1: Company Overview - Longyuan Carbon Asset Company was established in August 2008 and is one of the first specialized carbon asset management institutions in China [1]. - The company has received various certifications, including national high-tech enterprise and "specialized, refined, distinctive, and innovative" small and medium-sized enterprises in Beijing [1]. Group 2: Project Overview - In 2022, the company initiated a project titled "Research and Demonstration of Integrated Intelligent Monitoring Application for Carbon Emission and Trading Based on Blockchain," with a total investment of 24.261 million yuan, spanning three years [2]. - The project integrates blockchain technology with carbon management, covering carbon emission monitoring, asset trading, and carbon footprint accounting [2]. Group 3: Technical Features and Project Advantages - The project features a fully digital management system that integrates 1,294 verification elements and establishes a dynamic personnel management mechanism [3]. - An innovative trading platform utilizes RPA robotic process automation technology for automated management of national carbon market accounts, significantly reducing trading risks [3]. - The carbon footprint accounting platform employs lifecycle assessment methods and integrates multi-source data to support real-time carbon emission calculations [3]. Group 4: Benefit Analysis - The project has managed carbon assets valued over 10 billion yuan, marking a shift from traditional manual management to digital and intelligent management [4]. - It has improved efficiency in carbon quota trading, completing 105 transactions worth 1.89 billion yuan within five days, compared to previous cycles of 1.5 to 2 months [4]. - The project has generated significant cost savings, including 9.8 million yuan in reduced compliance costs and 3.933 million yuan in labor cost savings [4].

Investment Rating - The report initiates coverage with a "Buy" rating for the company [4][9]. Core Views - The company, a subsidiary of the State Grid, is driven by a dual business model of "finance + manufacturing," which positions it to benefit from accelerated investments in the power grid [1][4]. - The carbon asset management business is expected to continue its high growth due to the establishment of a carbon market framework and increasing trading volumes [2][38]. - The electrical manufacturing segment is poised to benefit from rising investments in distribution networks, particularly in amorphous transformers, which are more energy-efficient compared to traditional silicon steel transformers [3][46]. Summary by Sections Company Overview - The company is a subsidiary of the State Grid Corporation and has diversified into financial services through significant asset restructuring completed in 2020, which included trust, securities, and futures businesses [1][14]. - In 2024, the company reported total revenue of 11.288 billion yuan, a year-on-year increase of 3.60%, and a net profit attributable to shareholders of 1.574 billion yuan, up 15.39% [1][24]. Carbon Asset Management - The carbon asset management business has shown promising growth, with revenue reaching 0.70 billion yuan in 2024, reflecting a year-on-year increase of 13.39%, and net profit of 0.10 billion yuan, up 14.51% [2][40]. - The company is the only specialized carbon asset management firm within the State Grid system, focusing on carbon trading and management services [2][40]. Electrical Manufacturing - The company’s subsidiary, ZhiXin Electric, is a leader in the production of amorphous alloy transformers, which are expected to gain market share as distribution network investments increase [3][46]. - From 2020 to 2024, ZhiXin Electric's revenue grew from 5.001 billion yuan to 7.375 billion yuan, with a compound annual growth rate (CAGR) of 10%, and net profit increased from 0.16 billion yuan to 1.49 billion yuan, with a CAGR of 75% [3][24]. Financial Forecast and Valuation - The company is projected to achieve revenues of 12.487 billion yuan, 13.908 billion yuan, and 15.578 billion yuan for the years 2025, 2026, and 2027, respectively, with year-on-year growth rates of 11%, 11%, and 12% [4][8]. - The expected net profits for the same years are 1.731 billion yuan, 1.850 billion yuan, and 1.961 billion yuan, with growth rates of 10%, 7%, and 6% [4][8].