Wind/solar power generation in the first half of the year was in line with the same situation in the industry. Since the company did not disclose monthly operating data, we recently updated the operating situation with the company. Currently, we expect the company's year-to-date wind/light utilization hours to be similar to the situation in other industries, that is, there is still a high chance of a year-on-year decline in the number of units in the first half of the year. We had anticipated the increase in utilization hours brought about by the company's fine-tuning of the project, which should now be largely offset. As a result, we lowered the company's 2024/25 power generation forecast by about 1%/2% to reflect current conservative power generation expectations.

Breakthroughs in wind/light installed capacity are still likely to be achieved in 2024. Although the power generation should be slightly lower than expected, we believe that the company's goal of adding 2.7 gigawatts of wind and light installed capacity this year should be completed as scheduled (compared to 0.8 gigawatts of the company's new installed capacity in 2023) to drive profit growth in 2025. The company already has 1.69 gigawatts of wind and light in trial operation in the first quarter of this year. The company indicated earlier that this portion of the installed capacity will have a good chance of starting official operation in the 2-3 quarter of this year. According to the company's equity incentive target, we are currently maintaining the company's forecast of 4.2 gigawatts of new wind/light installed capacity per year in 2025/26. The company believes that achieving this target will depend on the utilization level of the 2024 project.

Profit forecasts for 2024-25 have been lowered slightly, and dividends should be maintained for the next two years. The company's profit forecast for 2024/25 was lowered by 0.3%/0.7% due to adjustments to the company's forecasting of the company's wind/light utilization hours and operating costs. The company's dividend ratio for 2023 is 38% (currently the 2024/25 dividend rate is 7%). It is expected that under the premise of further speeding up installation in 2025-26, the company is likely to keep the dividend of RMB 0.14 unchanged in 2024-26. We believe that management has always attached importance to shareholder returns, and that dividends per share can be moderately increased in response to improvements in cash flow.

Earnings are expected to return to the upward trend in 2025, and the dividend ratio is still the highest in the sub-sector. Compared to electricity reform, we believe that the company's plan to speed up new installations should bring great benefits. The factors that kept the profit flat in 2024 due to the adjustment of gas, electricity and electricity prices should be widely understood by the market. We believe that the company's profit will return to the upward trend in 2025. To better reflect the company's profit growth trend, we moved the company's valuation benchmark to 2025, maintained an annual earnings ratio of 5.2 times (5-year historical average), raised the target price to HK$2.50 (previously HK$2.1), and maintained the purchase rating. Currently, the company's 7.0% dividend ratio is still the highest in the operator sub-sector, which supports the company's valuation. At the same time, with the recent improvement in the company's trading volume, we believe this will help the company to be included in the Hong Kong Stock Connect opportunity in the future.