CYPC(SH:600900)2025-08-05 03:15Summary of China Yangtze Power Conference Call Company Overview - Company: China Yangtze Power (CYPC) - Industry: Electric Utilities - Market Cap: Rmb681 billion (US$94.7 billion) as of 31 July 2025 - Installed Capacity: 71.7 GW, accounting for 17% of China's total hydropower capacity as of the end of 2023 [10][25] Key Financial Results - 1H25 Preliminary Results: - Net profit: Rmb12.98 billion, up 14.2% YoY - Achieved 38% of consensus full-year forecasts, consistent with historical run-rate [2] - Implied 2Q25 net profit: Rmb7.80 billion, up 5.5% YoY and 50.6% QoQ [2] Hydropower Resource Insights - Hydropower Generation: - 2Q25 generation: 69.0 billion kWh, up 1.6% YoY - 1H25 generation: 126.7 billion kWh, up 5.01% YoY - Water inflow: Increased 9.0% YoY in Wudongde but decreased 8.4% YoY in Three Gorges [3] - Outlook for 3Q25: - Weak water inflow expected to continue, with a 35% YoY decline in July - 3Q historically represents 44% of full-year volume, potentially dragging down full-year power generation [3] Capital Expenditure Plans - Capex Announcement: - Rmb26.6 billion planned for Gezhouba shipping channel expansion - Estimated annual capex could reach Rmb3.5 billion over a 91-month construction period - Expected impact on total earnings post-completion: Rmb0.7-0.8 billion, including Rmb0.6 billion in incremental depreciation and Rmb0.16 billion in reduced power generation revenue [4] - Additional Expansion: - Considering Rmb7 billion capex for expanding Gezhouba power plant capacity, timeline not yet determined [4] Valuation and Investment Outlook - Price Target Revision: - DCF-based price target revised down from Rmb32.5 to Rmb31.0 due to increased capex and negative net profit impact anticipated 10 years later - Dividend yield remains attractive at 3.5% for 2026E [5] - Investment Rating: - Maintained "Buy" rating despite concerns over stable dividend payout, supported by over Rmb45 billion free cash flow by end-2024 [5] Financial Metrics - Current Price: Rmb27.84 as of 31 July 2025 - 12-Month Price Target: Rmb31.00 - 52-Week Range: Rmb31.11 - Rmb26.97 - EPS Estimates: - 2025E: Rmb1.36 - 2026E: Rmb1.45 - 2027E: Rmb1.55 [7][8] Risks and Considerations - Downside Risks: - Utilization downside from potential slowdown in domestic power demand growth - Fluctuations in water inflow in the Yangtze River - Possible further hydropower tariff cuts - Risks associated with overseas expansions [11] Additional Insights - Market Return Assumption: 6.7% - Forecast Stock Return: 14.8% including 11.4% price appreciation and 3.5% dividend yield [9]