January 15, 2026 05:30 PM GMT M Update Strong 2025 preliminary results underpinned by robust revenue growth, margin expansion Reaction to earnings Strengthens our thesis Modest upside Modest revision higher Impact to our thesis Financial results versus consensus Direction of next 12-month consensus EPS Source: Company data, Morgan Stanley Research Key Takeaways According to Siyuan's preliminary results, revenue was Rmb21.1bn in 2025, up 37.2% yoy and 3.8% higher than our estimate of 20.4bn. Net profit came ...

Summary of Tongwei Co. Ltd. Conference Call Company Overview - **Company**: Tongwei Co. Ltd. - **Ticker**: 600438.SS - **Industry**: China Utilities - **Market Cap**: Rmb99,989.1 million - **Current Share Price**: Rmb22.21 (as of October 24, 2025) - **Price Target**: Rmb21.85 - **52-Week Range**: Rmb32.05 - Rmb14.89 - **Average Daily Trading Value**: Rmb1,517 million Key Financial Highlights - **3Q25 Performance**: - Reported a net loss of Rmb315 million, a significant improvement from losses of Rmb2.4 billion in 2Q25 and Rmb2.6 billion in 1Q25 [3][8] - Revenue remained stable at Rmb24.1 billion, slightly down from Rmb24.6 billion in 2Q25 [3] - Gross margin improved to 7.2%, up from 2.0% in 2Q25 and -2.9% in 1Q25, attributed to the recovery in polysilicon prices [3][8] - EBIT turned to a mild profit of Rmb88 million in 3Q25 after consecutive losses since 1Q24 [8] Industry Context - **Polysilicon Price Recovery**: The recovery in polysilicon prices since early July has positively impacted Tongwei's gross profit margin and reduced asset impairment [8] - **Asset Impairment**: Reduced to Rmb247 million in 3Q25 from -Rmb1.6 billion in 2Q25 and -Rmb796 million in 1Q25, indicating improved inventory management and market conditions [3][8] Investment Thesis - **Market Outlook**: The overall industry view is considered attractive, with expectations of meaningful upside in the next 12 months [2][5] - **Consensus EPS Direction**: Financial results are seen as aligning with or exceeding consensus expectations, leading to a revision of earnings forecasts higher [2] Risks and Considerations - **Upside Risks**: - Higher-than-expected photovoltaic (PV) installations globally - Less-than-expected new polysilicon capacity from new entrants - Higher-than-expected polysilicon prices - Faster development in next-generation solar cell technologies [11] - **Downside Risks**: - Lower-than-expected PV installations worldwide - Intensified competition and pricing pressures across the supply chain - Slower overseas market exploration for its module business - Intensified trade tensions [11] Valuation Methodology - **Valuation Approach**: Price target derived from discounted cash flow (DCF) methodology, capturing long-term cash flows for 2026-2036 with a WACC of 9.5% [9] Conclusion - **Investment Rating**: Equal-weight, indicating a neutral stance on the stock with potential for moderate returns in line with industry performance [5][29]

Summary of China Yangtze Power Co. Conference Call Company Overview - **Company**: China Yangtze Power Co. (CYPC) - **Industry**: Utilities, specifically hydropower generation - **Market Cap**: Rmb687,312 million - **Stock Rating**: Overweight - **Price Target**: Rmb34.79, representing a 24% upside from the current price of Rmb28.09 as of August 29, 2025 Key Financial Highlights - **1H25 Net Profit**: Rmb13.06 billion, up 14.9% year-over-year (yoy), exceeding preliminary results by 0.6% [2][6] - **1H25 Revenue**: Rmb36.7 billion, up 5.3% yoy, slightly above preliminary results by 0.3% [2][6] - **Power Generation**: Increased by 5.0% yoy, aligning with revenue growth, indicating stable average power tariffs [2] - **Finance Costs**: Decreased by 14.0% yoy to Rmb4.9 billion in 1H25, contributing to profit growth [2][6] - **Investment Income**: Rmb2.6 billion, down 10.5% yoy [2] - **Capital Expenditures (Capex)**: Rose significantly by 74.3% yoy to Rmb6.2 billion in 1H25 [2] Quarterly Performance - **2Q25 Net Profit**: Rmb7.9 billion, up 6.4% yoy [3] - **2Q25 Revenue**: Rmb19.7 billion, up 2.6% yoy [3] - **Finance Costs in 2Q25**: Fell by 14.9% yoy to Rmb2.38 billion [3] Operational Insights - **Power Generation in 2Q25**: Totaled 69 billion kWh, with Three Gorges' generation down 12.4% and hydro resources down 18.5% yoy [6] - **Hydropower Generation Growth**: 1.6% yoy increase noted in 2Q25 [6] Valuation and Risks - **Valuation Methodology**: Based on discounted cash flow (DCF) with a weighted average cost of capital (WACC) of 6.7% and no terminal growth assumption [7] - **Upside Risks**: Include better-than-expected hydropower resources, dividend payout ratios, utilization hours, and renewable energy capacity expansion [8] - **Downside Risks**: Include weaker hydropower resources, lower dividend payout ratios, and lower renewable energy capacity expansion [9] Future Projections - **EPS Estimates**: Expected to grow from Rmb1.33 in FY24 to Rmb1.66 in FY27 [4] - **Revenue Growth**: Projected to increase from Rmb84.49 billion in FY24 to Rmb94.40 billion in FY27 [4] - **EBITDA Growth**: Expected to rise from Rmb64.18 billion in FY24 to Rmb72.56 billion in FY27 [4] Conclusion - CYPC demonstrates robust earnings growth driven by increased power generation and reduced finance costs, with a positive outlook supported by strategic capital investments and stable revenue growth. The company is well-positioned within the utilities sector, particularly in hydropower, with a favorable risk-reward profile for investors.

Investment Rating - The investment rating for China Yangtze Power Co. is Overweight [4][81]. Core Views - The report indicates an attractive industry view, supported by improved water resources and a sustainable high payout ratio of over 70% from 2021 to 2025 [14][4]. - The price target has been revised to Rmb34.79, reflecting a 1.7% increase due to earnings revisions [3][8]. - The net profit estimates for 2025 and 2026 have been increased by 3.3% and 2.6%, respectively, with a new forecast for 2027 net profit at Rmb40.5 billion [2]. Summary by Sections Price Target and Scenarios - The price target is set at Rmb34.79, with a bull case of Rmb42.53 and a bear case of Rmb24.99 [8][11]. - The bull case assumes a 5% increase in utilization hours and a 1 percentage point higher tariff growth from 2025 [12]. - The bear case assumes a 5% decrease in utilization hours and a 3 percentage point lower tariff growth from 2025 [17]. Financial Estimates - The expected EPS for fiscal years ending in December are projected as follows: 1.33 for 2024, 1.52 for 2025, 1.61 for 2026, and 1.66 for 2027 [4]. - Revenue from electricity generation is forecasted to be Rmb74.48 billion in 2024, Rmb79.46 billion in 2025, Rmb81.31 billion in 2026, and Rmb82.30 billion in 2027 [19]. Investment Drivers - Key investment drivers include the recovery of hydro resources, synergy in power generation among hydro stations, and rising utilization of newly acquired units [14]. - The report emphasizes the company's ability to generate stable profits and cash flows from its hydropower stations, supported by a WACC of 6.7% [8].

Summary of China Yangtze Power Co. Research Call Company Overview - **Company**: China Yangtze Power Co. - **Industry**: Utilities - **Market Cap**: Rmb645,868.8 million - **Stock Rating**: Overweight - **Price Target**: Rmb34.22 - **Current Share Price**: Rmb28.40 (as of April 3, 2025) - **52-Week Range**: Rmb32.28 - Rmb24.39 - **Shares Outstanding**: 22,742 million [6][6] Key Points Earnings and Cash Flow - The company provides defensive earnings and cash flow supported by six hydropower stations with a total installed capacity of 72GW [2][2] - Earnings growth in the medium term is expected to be driven by: 1. Tariff increases from auxiliary services, green certificates, and higher market volume 2. Financial cost savings 3. Decreased depreciation costs due to the end of generators' depreciation period [2][2] Dividend Policy - The company has committed to a dividend payout ratio of over 70% during the period from 2021 to 2025 [2][2] Probability Estimates - There is an estimated 70% to 80% probability for the positive scenario regarding the company's performance [3][3] Valuation Methodology - The price target is derived from a discounted cash flow (DCF) methodology, assuming stable profit and cash flows from hydropower stations - The weighted average cost of capital (WACC) is set at 6.7%, with no terminal growth assumed [9][9] Risks - **Upside Risks**: 1. Better-than-expected hydropower resources 2. Higher-than-expected dividend payout ratio 3. Increased hydropower utilization hours 4. Greater renewable energy capacity expansion [10][10] - **Downside Risks**: 1. Weaker-than-expected hydropower resources 2. Lower-than-expected dividend payout ratio 3. Reduced renewable energy capacity expansion [11][11] Additional Insights - The company is positioned favorably within the utilities sector, with an attractive industry view [6][6] - Analysts express confidence in the company's ability to generate stable cash flows, which supports the positive outlook for its stock price [9][9] This summary encapsulates the essential insights from the research call regarding China Yangtze Power Co., highlighting its financial stability, growth prospects, and associated risks.

Summary of CGN Power Co., Ltd Conference Call Company Overview - **Company**: CGN Power Co., Ltd (1816.HK) - **Industry**: China Utilities - **Date of Call**: March 26, 2025 Key Points Financial Performance - **Earnings**: FY24 earnings remained flat, with a recurring earnings increase of 1% year-over-year, aligning with expectations [2][7] - **Dividend**: Dividend per share (DPS) announced at Rmb0.095, a 1% increase from Rmb0.094 in 2023, with a payout ratio of 44.4%, slightly lower than expectations [7] - **Revenue**: Total revenue for FY24 was Rmb86.8 billion, a 5% increase from Rmb82.5 billion in FY23 [7] - **Power Generation**: Increased by 6% year-over-year in 2024, capturing a 54.38% market share in China's nuclear power sector [7] Market Conditions - **Tariff Changes**: Anticipated declines in market tariffs in Guangdong (down Rmb0.06) and Guangxi (down Rmb0.10) are expected to negatively impact 2025 earnings. These provinces contributed 54% and 11% of revenue, respectively, in 2024 [3][7] - **Average Market Tariff**: Decreased by 3.85% year-over-year in 2024 [7] Operational Insights - **Overhauls**: CGN plans to conduct 19 overhauls in 2025, compared to 20 in 2024 [7] - **Outage Days**: The company expects fewer outage days in 2025, which may improve operational efficiency [2] Valuation and Outlook - **Price Target**: The price target is set at HK$3.19, indicating a potential upside of 25% from the current price [2] - **P/E Ratio**: A P/E multiple of 13x is applied to the 2025E EPS, reflecting a recovery in power tariff risks [11] Risks - **Upside Risks**: Include higher-than-expected utilization, upward adjustments of on-grid tariffs, and timely approvals of new projects [12] - **Downside Risks**: Include lower-than-expected utilization, downward adjustments of on-grid tariffs, and delays in new project commissioning [12] Additional Insights - **Market Share**: CGN Power holds a significant market share in the nuclear power sector, indicating strong competitive positioning [7] - **Analyst Ratings**: The stock is rated as "Overweight," suggesting a favorable outlook compared to the industry average [2] This summary encapsulates the essential insights from the conference call, highlighting CGN Power's financial performance, market conditions, operational strategies, and future outlook.