Investment Rating - The report maintains an "Outperform the Market" rating for the company [6][31]. Core Views - The company achieved a net profit of 2.97 billion yuan in the first three quarters of 2025, representing a year-on-year increase of 13%. The total revenue for the same period was 55.52 billion yuan, up 16% year-on-year [10][31]. - The report highlights the expected demand for power construction during the "14th Five-Year Plan" period, with significant projects in hydropower and nuclear energy anticipated to drive growth [4][31]. Financial Performance - In Q3 2025, the company reported a revenue of 17.37 billion yuan, a year-on-year increase of 20.7%, and a net profit of 1.06 billion yuan, up 13.2% year-on-year and 39.8% quarter-on-quarter [10][31]. - The gross margin for the first three quarters of 2025 was 15.4%, a decrease of 0.4 percentage points year-on-year. However, Q3 2025 saw a slight recovery in gross margin to 15.2%, with expectations for continued improvement as low-price orders are digested [2][16]. Order Intake and Production - The company secured new orders totaling 88.58 billion yuan in the first three quarters of 2025, a 9% increase year-on-year. Notably, renewable energy equipment orders rose by 23% to 26.92 billion yuan [3][23]. - The company aims to produce 73 GW of power generation equipment in 2025, a 26% increase from 2024's target of 58.1 GW [3][31]. Market Outlook - The report emphasizes the favorable policy environment for energy equipment development, particularly in coal, gas, and renewable energy sectors, which is expected to benefit the company due to its leading technology in various power sources [4][31]. - The anticipated peak in coal power and other industry deliveries in 2025 is expected to enhance the company's performance, with adjusted profit forecasts reflecting this outlook [31].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report highlights improvements in gross margin and expense ratio, with expectations for a peak in deliveries this year [4] - The company achieved a revenue of 37.62 billion yuan in the first half of 2025, representing a year-on-year increase of 14.3%, and a net profit attributable to shareholders of 1.91 billion yuan, up 12.9% year-on-year [7] - The report anticipates significant earnings elasticity due to a peak in coal and nuclear power deliveries in 2025, supported by a robust order backlog [7] Financial Summary - The company's revenue projections for 2025-2027 are 82.43 billion yuan, 87.34 billion yuan, and 91.09 billion yuan, with year-on-year growth rates of 20.18%, 5.95%, and 4.30% respectively [6] - The net profit attributable to shareholders is forecasted to be 4.06 billion yuan, 4.73 billion yuan, and 5.44 billion yuan for 2025-2027, with growth rates of 39%, 17%, and 15% respectively [7] - The price-to-earnings (P/E) ratios for the years 2025, 2026, and 2027 are projected to be 15.79, 13.56, and 11.78 respectively [6][7]

Core Insights - In the first half of 2025, the company achieved a net profit attributable to shareholders of 1.91 billion yuan, representing a year-on-year increase of 12.9% [1] - The company reported a revenue of 38.15 billion yuan in the first half of 2025, up 14% year-on-year, with a gross margin of 15.5% and a net margin of 5.5% [1] - The company faced asset impairment losses totaling 667 million yuan in the first half of 2025, which negatively impacted net profit [1] Financial Performance - For Q2 2025, the company recorded a revenue of 21.6 billion yuan, a year-on-year increase of 17.4% and a quarter-on-quarter increase of 30.6% [1] - The net profit for Q2 2025 was 756 million yuan, down 3.8% year-on-year and down 34.5% quarter-on-quarter [1] - The gross margin for Q2 2025 was 14.6%, up 1.9% year-on-year but down 2% quarter-on-quarter [1] Order and Market Development - The company signed new orders worth 65.49 billion yuan in the first half of 2025, a year-on-year increase of 17% [2] - Renewable energy equipment orders accounted for 20.18 billion yuan, up 44% year-on-year, while clean and efficient energy equipment orders based on coal power were 24.62 billion yuan, down 3% [2] - The company aims to achieve a power generation equipment output of 73 GW in 2025, a 26% increase from 58.1 GW in 2024 [2]

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].