2025-10-19 15:58Summary of Longyuan Power Conference Call Company Overview - Longyuan Power is a subsidiary of China Energy Group, focusing on wind power, with a wind power installed capacity ratio of 73% and solar power at 27% [2][5][9] - The company has maintained a long-term Return on Equity (ROE) of 8%-9% since 2011, but has faced pressure on electricity prices and competition from thermal power, leading to a decline in revenue per kilowatt-hour [2][5] Industry Context and Valuation - The renewable energy industry is experiencing favorable policies, with a notable increase in new installed capacity since July 2025 [3] - Longyuan Power's price-to-book (PB) ratio has fluctuated significantly, dropping from 2.34 in September 2021 to a historical low of 0.52 in February 2024, and currently recovering to 0.85 [3][7] - The company is expected to benefit from industry valuation recovery due to its first-mover advantage and competitive pricing post the implementation of Document 136 [3][7] Financial Performance - As of mid-2025, Longyuan Power's accounts receivable stood at 49.5 billion yuan, accounting for 56% of net assets, with annual state subsidies expected to be between 12-13 billion yuan [4][11] - The price of green certificates has rebounded to 5.7 yuan per certificate, a 23% year-on-year increase, with trading volumes for green certificates and green electricity rising by 100%-200% [4][13] Asset and Project Pipeline - Longyuan Power's current operational capacity includes 31.4 GW of wind power and 11.8 GW of solar power, with plans to add 5 GW of new capacity in 2025 [8][9] - Future growth is anticipated from the injection of 4 GW of green power projects from the parent group, upgrades of old equipment, and a strong pipeline of offshore wind and large-scale projects [2][8] Market Dynamics - The marketization of electricity pricing has led to wind power prices being higher than solar power prices, benefiting Longyuan Power as a major wind power competitor [10] - The company has a competitive edge due to its internal synergies and the alignment of its renewable energy projects with its thermal power operations [10] Future Profitability and Projections - Longyuan Power's projected net profits for 2025-2027 are 2.43 billion yuan, 7.22 billion yuan, and 7.93 billion yuan, reflecting growth rates of 0%, 12%, and 10% respectively [14] - Despite short-term performance pressures, the overall trend for the company is positive, with expectations for gradual recovery in the green energy sector [14]