Incident: On August 28, the company released its 2024 semi-annual report. The company achieved operating income of 15.059 billion yuan, a year-on-year increase of 9.89%; realized net profit attributable to mother 4.039 billion yuan, a year-on-year decrease of 10.58%; and realized net profit deducted from non-mother 4.038 billion yuan, a year-on-year decrease of 8.59%. 2024Q2 achieved operating income of 7.16 billion yuan, an increase of 4.51% year on year and a decrease of 9.36% month on month; realized net profit of 1.617 billion yuan, a decrease of 22.37% year on year and a decrease of 33.24% month on month; realized net profit deducted from non-return mother of 1.618 billion yuan, a decrease of 20.18% year on year and 33.14% month on month. The profit level of participating companies fluctuated, and investment income decreased by 18.59% year on year.

The amount of electricity generated increased, but the overall decline in electricity prices led to a year-on-year decline in performance. 24H1 added 1.3264 million kilowatts of installed capacity, with a cumulative installed capacity of 41.3708 million kilowatts. The 0.1 million kilowatt photovoltaic project in Yazhou, Hainan, the 0.1 million kilowatt photovoltaic+ energy storage project in Yu County, and the 0.25 million kilowatt wind power project in Fuyang Southern Wind Power Base (Yingshang) were put into operation. 1H24 completed 36.118 billion kilowatt-hours of power generation, an increase of 28.58% over the previous year; among them, land wind/ sea wind/ solar/ hydropower/ independent energy storage completed power generation capacity of 152.11/78.47/12.618/0.257/0.18 billion kilowatt-hours, YOY +7.29%/+22.55%/+73.28%/+27.23%/+640.00%. 24Q2 completed 18.383 billion degrees of power generation, an increase of 28.47% over the previous year; of these, land wind/sea wind/solar energy YOY +3.52%/+18.81%/+80.43%, respectively.

Invest in major new energy bases and promote the integration of “wind, solar and fire storage”. The company invested nearly 80 billion yuan to build the Kubuqi base project. It plans to start construction in September '24 to achieve full capacity grid-connected power generation in '27. As an integrated “wind, solar and fire storage” delivery project, it will build 8 million kilowatt photovoltaics, 4 million kilowatt wind power, 0.2 million kilowatt of photothermal power, and support a 4 million kilowatt coal power project and 5 million kilowatt-hour new energy storage. It is proposed to transfer the power generation to the Beijing-Tianjin-Hebei region through the Mengxi - Beijing-Tianjin-Hebei ±800 kV UHV line, which has already been pre-tested, to achieve exceptional high ratio consumption. Delivery end: Excellent resource endowment. Located in a Class I wind energy and photovoltaic resource area, rich in scenic resources. Receiver:

The secondary and tertiary industries in the Beijing-Tianjin-Hebei region have a heavy electricity load. There is still an electricity gap, and the consumption capacity is strong. It is conducive to building exemplary projects and expanding scale advantages.

The advantages of offshore wind power have been enhanced, and frequent breakthroughs have been made in offshore wind projects. As of 24H1, the cumulative installed capacity of Haifeng has reached 5.6864 million kilowatts, accounting for 14.90% of the national market share. Fujian Zhangpu Liuao 0.4 million kilowatt offshore wind farm phase II project achieved full capacity grid connection in June, and the feed-in capacity can exceed 1.6 billion kilowatt-hours/year after full commissioning; Yangjiang Qingzhou 5, 6, and 7 offshore wind farm projects are expected to be put into operation in 25 years; Shanghai Jinshan 0.306 million kilowatt offshore wind farm phase I project will achieve grid-connected power generation by the end of 24; Jiangsu Dafeng's 0.8 million kilowatt offshore wind power project has completed approval for 500 kV transmission projects; The 0.656 million kilowatt offshore wind farm project in Changle Haihai District J was approved.

Investment suggestion: The company's new installed capacity in '23 is gradually delivering on performance. However, electricity prices are under downward pressure. We expect the share of net profit to mother in 24/25/26 is 8.308/9.662/10.447 billion yuan, and EPS for 24/25/26 is 0.29/0.34/0.37 yuan respectively, corresponding to the closing price of PE 16/14/13 times on August 30, respectively, maintaining the “recommended” rating.

Risk warning: changes in natural landscape conditions; electricity consumption falls short of expectations; risk of electricity price fluctuations.