CHINA LONGYUAN(HK:00916) BOCOM International·2025-04-01 09:56Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 8.00, indicating a potential upside of 28.4% from the current price of HKD 6.23 [1][2][16]. Core Insights - The report highlights that the wind power feed-in tariff for 2024 is better than expected, and the company's three-year dividend policy is likely to be well-received by investors [2][7]. - The company is expected to see a 2.9% year-on-year increase in net profit for 2024, reaching RMB 6.38 billion, which is 4% higher than previous expectations [7][8]. - The report anticipates a slight slowdown in new installations in 2025, with a projected net addition of 6 GW of wind and solar capacity [7][12]. Financial Overview - Revenue projections for the company are as follows: RMB 37.64 billion in 2023, RMB 31.37 billion in 2024, and RMB 34.66 billion in 2025, reflecting a year-on-year decline of 16.7% in 2024, followed by a recovery in 2025 [6][17]. - Net profit is forecasted to increase from RMB 6.36 billion in 2023 to RMB 6.92 billion in 2025, with a compound annual growth rate of approximately 7.8% from 2024 to 2025 [6][17]. - The company maintains a dividend payout ratio of 30%, with the final dividend for 2024 expected to rise by 2% to RMB 0.2278 per share [7][8]. Operational Data - The company plans to add 7.4 GW of new wind and solar capacity in 2024, with expectations of 6 GW in 2025, which will help manage capital expenditures [7][12]. - The total installed capacity is projected to grow from 35.59 GW in 2023 to 47.14 GW by 2025, with significant contributions from renewable energy sources [12][17]. Valuation Metrics - The report suggests an upward adjustment in the 2025 earnings forecast by 7.1%, while the 2026 forecast is adjusted downwards by 5.9% due to anticipated slower installation rates [7][8]. - The target price corresponds to a price-to-earnings ratio of 9 times the 2025 earnings, indicating a favorable valuation outlook [7][16].