Investment Rating - The report maintains a "Buy" rating for the company [4] Core Viewpoints - The company achieved a significant increase in bidding amounts for both internal and external networks, actively expanding into the AIDC market to support its development [1][2] - The company's revenue for H1 2025 reached 4.02 billion yuan, a year-on-year increase of 15.62%, with a net profit attributable to shareholders of 476 million yuan, up 12.41% year-on-year [1] - The company is focusing on the automation of power grids and has seen a 60% increase in bidding amounts in the national grid's centralized bidding [2] - The company is also expanding its presence in the renewable energy sector, securing multiple projects in offshore wind power and data centers [3] Summary by Relevant Sections Financial Performance - In H1 2025, the company reported revenue of 4.02 billion yuan, a 15.62% increase year-on-year, and a net profit of 476 million yuan, up 12.41% year-on-year [1] - For Q2 2025, revenue was 2.19 billion yuan, a 13.44% year-on-year increase and a 19.92% quarter-on-quarter increase, while net profit was 235 million yuan, a decrease of 3.24% year-on-year [1] Business Segments - The power grid automation business generated revenue of 1.73 billion yuan in H1 2025, a 2.21% increase year-on-year, while the industrial automation business saw revenue of 2.00 billion yuan, a 31.25% increase year-on-year [2] - The company is actively participating in the AIDC market, winning bids for several data center projects and offshore wind power projects [3] Profit Forecast and Valuation - The report maintains the original profit forecast, expecting net profits of 869 million yuan, 1.00 billion yuan, and 1.13 billion yuan for 2025, 2026, and 2027 respectively, with corresponding EPS of 1.04, 1.20, and 1.36 yuan [4][5] - The current stock price corresponds to a P/E ratio of 16, 14, and 13 for 2025, 2026, and 2027 respectively [4][5]

Financial Data and Key Metrics Changes - The company reported a portfolio growth of 65% over the last twelve months and 7% over the last quarter, reaching a total of eight gigawatts, with a goal of 10 gigawatts by the end of 2025 [1] - The cash balance at the end of Q2 was approximately NOK 373 million, with zero debt and a strong cash position [7][40] - The average annual return on equity since 2020 has been 22%, with a capital distribution program that includes dividends and share buybacks [7][8] Business Line Data and Key Metrics Changes - The portfolio in Italy grew by 125% during the quarter, reaching close to 450 megawatts [2] - The company has initiated a new sales process for a combined 500 megawatts of onshore wind and solar projects in South Africa [3] - The company is focusing on battery energy storage systems (BESS) and expects to see high returns on best projects, trading above €200,000 per megawatt [9][41] Market Data and Key Metrics Changes - In Sweden, there were 500 hours of negative prices in Q2, with expectations of 2,000 hours annually, creating opportunities for best projects [4] - Wholesale prices in the Nordics are currently the lowest in Europe, returning to levels seen in 2020 due to various factors including weather and demand [5] - The data center market in the Nordics is projected to consume 62 terawatt-hours by 2050, indicating strong future demand [27] Company Strategy and Development Direction - The company maintains an asset-light business model with a focus on project development rather than construction, aiming for a five times return on projects [7][14] - There is a strong emphasis on early sales and maintaining a robust cash position to negotiate effectively with clients [14][16] - The company is exploring new markets while being cautious about entering new territories without established sales [39] Management's Comments on Operating Environment and Future Outlook - Management highlighted strong regulatory support for renewable energy in Europe, particularly in Germany and Italy, which is expected to drive growth [6] - The company anticipates signing numerous new projects in Italy and Germany, as well as continued growth in South Africa [11][20] - Management expressed optimism about the sales process and the potential for high returns in the onshore wind market in South Africa [34] Other Important Information - The company has completed the transition to become 100% renewable by selling its remaining shares in Hermana Holding [1] - There are ongoing discussions regarding grid agreements and project developments in various markets, including Germany and the UK [19][30] - The company is assessing data center opportunities that align with its existing portfolio, indicating a strategic fit for future growth [26][29] Q&A Session Summary Question: What is the outlook for the company's growth in new markets? - Management indicated a cautious approach to entering new markets, focusing on securing sales in established markets first [39] Question: How does the company plan to manage costs moving forward? - The company is closely tracking costs and expects improved supply chain conditions to ease expenses [40] Question: What are the expectations for project development in Germany? - Management noted strong interest from major clients in Germany and the potential for significant project development due to high electricity prices [31][32]

Core Viewpoint - The company is expanding its presence in the renewable energy sector through significant contracts in Azerbaijan and domestic projects, driven by strong demand for energy engineering services [3]. Group 1: International Projects - On March 11, the company signed EPC contracts for two large photovoltaic projects in Azerbaijan, marking its first major undertaking in the country [2]. - The Bilasuvar project is noted as the largest photovoltaic project currently under construction in Azerbaijan, with a total capacity of 445MW [2]. - Azerbaijan aims to increase its renewable energy generation share from 20.3% in 2023 to 30% by 2030, indicating a growing market for renewable energy projects [3]. Group 2: Domestic Market Developments - The company is experiencing a surge in domestic orders due to a new electricity pricing policy that has sparked a rush for installations [3]. - Recent domestic contracts include a 75MW wind power project and multiple engineering projects for the State Grid, showcasing the company's ability to secure significant contracts [3]. Group 3: Strategic Initiatives - The company is actively participating in the construction of a national integrated computing power network, leveraging its technological advantages in green energy [4]. - Investments in data center projects are underway in several key locations, with the Gansu Qingyang data center set to begin operations in September 2024 [4]. - The company has signed a conditional share subscription agreement with Chengdi Xiangjiang to establish a "national team" for computing power centers [4].

Investment Rating - The report maintains a "Buy" rating for China Energy Construction (3996.HK) [6] Core Views - The company is experiencing robust domestic and international demand for energy projects, highlighted by recent contracts for large photovoltaic projects in Azerbaijan, marking its first major EPC project in that market [2][3] - The company is actively constructing a nationwide integrated computing power network, leveraging its technological advantages in green energy and integrated construction [3] - The company's financial performance is strong, with a projected net profit growth of 17.3% year-on-year for the first three quarters of 2024, leading to an upward revision of the 2024 net profit forecast to 8.6 billion CNY [4] Summary by Sections Recent Developments - On March 11, the company signed EPC contracts for two large photovoltaic projects in Azerbaijan, with a total capacity of 760MW, indicating a significant expansion into the renewable energy sector [2] - The domestic market is also seeing a surge in orders due to new electricity pricing policies, with the company winning multiple contracts for wind and power grid projects [2] Business Strategy - The company is focusing on building a national integrated computing power network, with investments in data center projects across several key locations [3] - The Gansu Qingyang big data industrial park project is highlighted as a key initiative, with the first phase expected to be operational by September 2024 [3] Financial Performance - The company’s revenue is projected to grow from 366.4 billion CNY in 2022 to 481.7 billion CNY by 2026, with a compound annual growth rate of approximately 6.23% [5] - The net profit is expected to increase from 7.8 billion CNY in 2022 to 9.8 billion CNY in 2026, reflecting a steady growth trajectory [5] - The report notes a low valuation level for the company, suggesting significant growth potential in its energy and computing power businesses [4]