Investment Rating - The investment rating for the company is "Outperform the Market" [6][4][28] Core Views - The company's net profit for 2024 is expected to decline by 17.7%, but there is a significant improvement in Q1 2025 with a net profit growth of 27% [1][9] - The company achieved a revenue of 69.7 billion yuan in 2024, representing a year-on-year increase of 14.9%, while Q4 2024 saw a revenue of 21.85 billion yuan, up 37% year-on-year and 52% quarter-on-quarter [1][9] - The company has a strong order backlog, with new orders exceeding 100 billion yuan in 2024 and a 36% year-on-year increase in Q1 2025 [3][23] Summary by Sections Financial Performance - The company's gross margin for 2024 was 14.2%, down 3.1 percentage points year-on-year, but improved to 16.6% in Q1 2025, indicating a recovery in profitability [2][15] - The total impairment loss for 2024 was 1.294 billion yuan, an increase of 620 million yuan from 2023, with a significant portion recognized in Q4 2024 [2][15] - The company’s revenue forecast for 2025 is set at 76.32 billion yuan, with net profit expected to reach 4.34 billion yuan, reflecting a growth of 48.5% year-on-year [5][31] Market Position and Orders - The company holds a market share of 41.6% in pumped storage and 45% in conventional hydropower, maintaining a leading position in the industry [3][24] - In 2024, the company secured new orders totaling 101.14 billion yuan, a 17% increase year-on-year, with a focus on clean and efficient energy equipment [3][23] - The company aims to achieve a power generation equipment output of 73 GW in 2025, up from 58.1 GW in 2024, indicating a growth of 26% [3][4] Profitability and Valuation - The company’s earnings per share (EPS) for 2025 is projected to be 1.28 yuan, with a price-to-earnings (P/E) ratio of 12.7 for the same year [5][29] - The forecast for net profit for 2026 and 2027 is 5.52 billion yuan and 6.09 billion yuan, respectively, with growth rates of 27.2% and 10.3% [5][31] - The current stock price corresponds to a P/E ratio of 12.7 for 2025, 10.0 for 2026, and 9.0 for 2027, indicating a favorable valuation [4][28]

Investment Rating - The investment rating for the company is "Outperform the Market" [4][6][28]. Core Views - The company is expected to see significant profit improvement in Q1 2025, with new orders steadily increasing. The net profit for 2024 is projected to decline by 17.7%, but Q1 2025 shows a 27% year-on-year growth [1][4][9]. - The company has a robust order backlog, with new orders exceeding 100 billion yuan in 2024, marking a 17% increase year-on-year, and a 36% increase in Q1 2025 compared to the same period last year [3][23][28]. - The company is anticipated to reach a peak in coal power and other industry deliveries in 2025, with a projected production capacity of 73 GW, up from 58.1 GW in 2024 [3][4][28]. Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 69.7 billion yuan, a year-on-year increase of 14.9%, but the net profit was 2.92 billion yuan, down 17.7% [1][5][9]. - For Q4 2024, revenue was 21.85 billion yuan, up 37% year-on-year and 52% quarter-on-quarter, with a net profit of 300 million yuan, down 53% year-on-year and 68% quarter-on-quarter [1][9]. - In Q1 2025, revenue reached 16.55 billion yuan, a 10% year-on-year increase, while net profit was 1.15 billion yuan, up 27% year-on-year and 288% quarter-on-quarter [1][9]. Margin and Cost Analysis - The gross margin for 2024 was 14.2%, down 3.1 percentage points year-on-year, primarily due to declining margins in thermal, gas, and wind power products [2][15]. - In Q1 2025, the gross margin improved to 16.6%, down 2.1 percentage points year-on-year but up 5.9 percentage points quarter-on-quarter, indicating a recovery in profitability [2][15]. - The company recorded impairment losses of 1.294 billion yuan in 2024, with a significant portion occurring in Q4 [2][15]. Market Position and Orders - The company holds a market share of 41.6% in pumped storage and 45% in conventional hydropower, maintaining a leading position in the industry [3][24]. - New orders in 2024 reached 101.14 billion yuan, with a notable increase in clean and efficient energy equipment orders [3][23]. - In Q1 2025, new orders amounted to 35.88 billion yuan, a 36% increase year-on-year, with clean energy equipment orders growing by 44% [3][23]. Future Outlook - The company has revised its profit forecasts for 2025-2027, projecting net profits of 4.34 billion yuan, 5.52 billion yuan, and 6.09 billion yuan, representing year-on-year growth rates of 48.5%, 27.2%, and 10.3% respectively [4][28]. - The current stock price corresponds to a PE ratio of 12.7 for 2025, indicating a favorable valuation compared to historical performance [4][28].

Core Viewpoint - The company's 2024 performance fell short of expectations, primarily due to significant asset impairment losses, while the first quarter of 2025 showed improvement in revenue and net profit growth [1][2]. Financial Performance - In 2024, total revenue reached 69.695 billion yuan, a year-on-year increase of 14.86%, while net profit attributable to shareholders was 2.922 billion yuan, a decrease of 17.7% due to asset impairment losses of approximately 1.15 billion yuan [1]. - For Q1 2025, total revenue was 16.548 billion yuan, up 9.93% year-on-year, and net profit attributable to shareholders was 1.154 billion yuan, an increase of 27.39% [1]. Business Segments - Clean and Efficient Energy: In 2024, revenue from coal, gas, and nuclear power increased by 17.8%, 87.6%, and 68.0% respectively, with gross margins slightly declining [1]. - Renewable Energy: In 2024, revenue from hydropower and wind power grew by 27.9% and 19.6% respectively, with the company ranking among the top three in offshore wind installations [1]. - Modern Manufacturing Services: Revenue from power station services surged by 61.9% in 2024, with a slight increase in gross margin [1]. Order Growth and Profitability - New effective orders increased by 17% in 2024 to 101.1 billion yuan, with Q1 2025 seeing a 36% rise to 35.88 billion yuan, driven by strong demand in clean and renewable energy equipment [2]. - In Q1 2025, the gross margin was 16.6%, a decrease of 0.7 percentage points year-on-year, while the net profit margin improved to approximately 7.1%, an increase of 1 percentage point [2]. Industry Trends - The company is expected to benefit from policy support for traditional energy sources, including coal, nuclear, and hydropower, with ongoing upgrades and approvals for new projects [3]. - Recent government initiatives aim to enhance the performance of existing coal power units and maintain a steady approval pace for nuclear power projects [3]. Profit Forecast and Valuation - The profit forecast for 2025 has been revised down by 11.1% to 4.16 billion yuan, with a new forecast for 2026 set at 5.01 billion yuan [4]. - Current A and H shares are valued at 12.4/10.3 times and 8.1/6.6 times P/E for 2025/2026, respectively, with target prices set at 17 HKD and 11.6 HKD, indicating potential upside [4].